UNITED STATES REPORTS VOLUME 262 CASES ADJUDGED IN THE SUPREME COURT AT OCTOBER TERM, 1922 FROM APRIL 10, 1923, TO AND REPORTER GOVERNMENT PRINTING OFFICE WASHINGTON 1923 The price of this volume is fixed under the Act of July 1, 1922, c. 267, 42 Stat. 816, at $2.50 per copy, delivered. Sold by the Superintendent of Documents, Government Printing Office, Washington, D. C. ii JUSTICES OF THE SUPREME COURT DURING THE TIME OF THESE REPORTS.1 WILLIAM HOWARD TAFT, Chief Justice. JOSEPH McKENNA, Associate Justice. OLIVER WENDELL HOLMES, Associate Justice. WILLIS VAN DEVANTER, Associate Justice. JAMES CLARK McREYNOLDS, Associate Justice. LOUIS D. BRANDEIS, Associate Justice. GEORGE SUTHERLAND, Associate Justice. PIERCE BUTLER, Associate Justice. EDWARD T. SANFORD, Associate Justice. HARRY M. DAUGHERTY, Attorney General. JAMES M. BECK, Solicitor General. WILLIAM R. STANSBURY, Clerk. FRANK KEY GREEN, Marshal. 1 For allotment of the Chief Justice and Associate Justices among the several circuits, see p. iv, post. in SUPREME COURT OF THE UNITED STATES. October Term, 1922.1 Order of Allotment of Justices. It is ordered, That the following allotment be made of the Chief Justice and Associate Justices of this Court among the circuits, agreeably to the act of Congress in such case made and provided, and that such allotment be entered of record, viz: For the First Circuit, Oliver Wendell Holmes, Associate Justice. For the Second Circuit, Louis D. Brandeis, Associate Justice. For the Third Circuit, Pierce Butler, Associate Justice. For the Fourth Circuit, William H. Taft, Chief Justice. For the Fifth Circuit, Edward T. Sanford, Associate Justice. For the Sixth Circuit, James C. McReynolds, Associate Justice. For the Seventh Circuit, George Sutherland, Associate Justice. For the Eighth Circuit, Willis Van Devanter, Associate Justice. For the Ninth Circuit, Joseph McKenna, Associate Justice. February 19, 1923. 1 For next previous allotment, see 260 U. S., p. xiv. IV TABLE OF CASES REPORTED. Page. Adams-Campbell Co., Keller v................... 741 A. Engelhard & Sons Co. v. Mackenzie........... 739 Aetna Casualty & Surety Co., Board of County Commrs., Columbiana County, v.................. 755 Agnello v. United States....................... 738 A. G. Spalding & Bros. v. Edwards, Collector of Internal Revenue................................ 66 Ahrenfeldt v. Miller, Alien Property Custodian.. 60 Albury v. Dyson, U. S. Marshal................. 747 American Bank & Trust Co. v. Federal Reserve Bank of Atlanta................................ 643 American Linseed Oil Co., United States v.......371 American Steel Foundries v. Robertson, Commr. of Patents..................................... 209 A. R. Hamilton & Co., Sandusky Cement Co. v.... 759 Arndstein, McCarthy, U. S. Marshal, v.......... 355 Arnold et al., Exrs., Stevens v................ 266 Asuarca, The S. S., v. Duche................... 760 Atchison, Topeka & Santa Fe Ry., McNulty v...... 746 Atchison, Topeka & Santa Fe Ry. v. Nichols......737 Atchison, Topeka & Santa Fe Ry., Railroad Comm. of California v................................ 737 Atlantic Coast Line R. R. v. Daughton, Commr. of Revenue..................................... 413 Atwater & Co. v. United States................. 495 Baldini v. United States...................... 749 Banton, District Attorney, Dier et al., Copartners, v. 147 Baron v. United States........................ 749 Barrett, Attorney General, State of Missouri ex rei., First National Bank in St. Louis v............. 732 Bartels v. State of Iowa....................... 404 v VI TABLE OF CASES REPORTED. Page. Baum et al., Trading as Beautex Co., v. Coty... 159, 729, 738 Beaton v. Duluth, Winnipeg & Pacific Ry........ 744 Beautex Co. v. Coty.................... 159, 729, 738 Beaver County, South Utah Mines & Smelters v.. 325 Becker, Cochran v.............................. 735 Begg et al., Receivers, v. City of New York.... 196 Bell v. United States.......................... 744 Bennett, Supt., v. Schwarz..................... 757 Bennett Mining Co. v. Lord..................... 172 B. F. Keith Vaudeville Exchange, Hart v........... 271 Bianchi v. Morales............................. 170 Biwabik Mining Co. v. Lord..................... 172 Blair v. Rorer’s Admr.......................... 734 Blake, United States Fidelity & Guaranty Co. v... 748 Bluefield Water Works & Imp. Co. v. Public Service Comm, of West Virginia......................... 679 Board of Commrs., Bryan County, Broadwell v.... 750 Board of Commrs., Columbiana County, Aetna Casu- alty & Surety Co. v........................... 755 Board of Commrs., Columbiana County, London & Lancashire Indemnity Co. v..................... 755 Board of Commrs., Tippecanoe County, Randall v.. 734 Board of Trade of Chicago v. Olsen, U. S. Attorney. 1 Bohning v. State of Ohio....................... 404 Bonner v. Middlebrooks, Sheriff................ 729 Bookbinder v. United States.................... 748 Broadwell v. Board of County Commrs., Bryan County......................................... 750 Bromwell Brush & Wire Goods Co. v. State Board of Charities & Corrections, Kentucky.............. 753 Brown, Four-in-One Coal Co. v.................. 749 Brown-Crummer Co. v. Rice Constr. Co........... 742 Brush Electric Co. v. City of Galveston........ 443 Bryan County, Board of Commrs., Broadwell v.... 750 Bullard, Major General, United States ex rel. Feld v. 760 Bums Baking Co. v. McKelvie, Governor.......... 728 TABLE OF CASES REPORTED. vn Page. Burns Bros. v. Steam Tug Interstate No. 1........ 753 Caldwell, Davis, Director General, v............. 743 California, State of, First National Bank of San Jose v............................................ 366 California Industrial Accident Comm., Madera Sugar Pine Co. v........................................ 499 California Railroad Comm. v. Atchison, Topeka & Santa Fe Ry...................................... 737 California Railroad Comm. v. Los Angeles & Salt Lake R. R......................................... 737 California Railroad Comm. v. Southern Pacific Co. 737 Calvert, Hunt v.................................. 746 Campbell v. State of North Carolina.............. 728 Campbell v. City of Olney.............. 352 Central Union Trust Co. of New York v. Edwards, Collector of Internal Revenue................... 744 Charities & Corrections, State Board of, Bromwell Brush & Wire Goods Co. v........................ 753 Charles Wolff Packing Co. v. Court of Industrial Relations, Kansas...................................522 Chicago Board of Trade v. Olsen, U. S. Attorney.. 1 Chicago, Rock Island & Pacific Ry., Phipps v..... 762 Chickasaw Nation v. United States ex rel. McAlester- Edwards Co........................................ 200 Childs, Trustee, National Surety Co. v........... 758 Chung Fook v. White, Commr. of Immigration.... 740 City National Bank of El Paso v. El Paso & North- eastern R. R..................................... 695 Clapp, Hunt v...................................... 746 Cleveland v. Mattingly, Judge...................... 744 Cleveland-Cliffs Iron Co. v. Lord.................. 172 Clyde, State of New York ex rel., v. Gilchrist, President .......................................... 94 Cochran v. Becker................................. 735 Cohn, Trading as Maclen Import Co., v. Coty...... 159, 729, 738 College Park, City of, Georgia Ry. & Power Co. v. 441 vin TABLE OF CASES REPORTED. Page. Collingwood, Hunt v............................ 746 Collins v. Loisel, U. S. Marshal........... 426, 730 Columbiana County, Board of Commrs., Aetna Casualty & Surety Co. v........................ 755 Columbiana County, Board of Commrs., London & Lancashire Indemity Co. v...................... 755 Commercial Trust Co. of New Jersey v. Miller, Alien Property Custodian............................. 51 Commonwealth S. S. Co., Vulcanite Roofing Co. v.. 742 Compagnie Generale Transatlantique v. Mellon, Secy, of Treasury.............................. 100 Connelly, Morse Dry Dock & Repair Co. v......... 756 Cornwell, Davis, Agent, v...... i................ 740 Cortina, Tisi alias, United States ex rel., v. Tod, Commr. of Immigration.......................... 735 Coty, Baum, et al., Trading as Beautex Co., v.. -.... 159, 729, 738 Coty, Cohn, Trading as Maclen Import Co., v.... *. 159, 729, 738 Coty, Ivory Novelties Trading Co. v.... 159, 729, 738 Coty, Magnum Import Co. v.............. 159,729,738 Court of Industrial Relations, Kansas, Wolff Pack- ing Co. v...................................... 522 Cuddeback, Admx., New York Central R. R. v...... 757 Cullinan v. Walker, Collector of Internal Revenue.. 134 Cunard S. S. Co. v. Mellon, Secy, of Treasury... 100 Cureton, Attorney General, Sonneborn Bros, v.... 506 Currie, Davis, Agent, v........................ 741 Curtis, Collins & Holbrook Co. v. United States. 215 Czizek, Western Union Tel. Co. v............... 739 Danielson, an Infant, Morse Dry Dock & Repair Co. v.......................................... 756 Daughton, Commr. of Revenue, Atlantic Coast Line R. R. v........................................ 413 Daughton, Commr. of Revenue, Norfolk Southern R. R. v....................................... 413 TABLE OF CASES REPORTED. ix Page. Daughton, Commr. of Revenue, Seaboard Air Line Ry. v............................................ 413 Daughton, Commr. of Revenue, Southern Ry. v.... 413 Davis, Director General, Ex parte.............. 274 Davis, Director General, v. Caldwell............ 743 Davis, Agent, v. Cornwell................’....... 740 Davis, Agent, v. Currie.......................... 741 Davis, Director General, v. Farmers Co-Operative Equity Co..................................... 312 Davis, Director General, v. Hanlon........... 742,762 Davis, Agent, v. Hareford................... 745 Davis, Agent, James v........................... 752 Davis, Director General, v. Long, Admx........... 750 Davis, Agent, v. O’Hara.......................... 741 Davis, Agent, v. Scroggins.................. 734 Davis, Young Men’s Christian Assn, of Columbus v. 739, 745 Decatur, Town of, Georgia Ry. & Power Co. v...... 432 Delaney v. United States......................... 742 Department of Trade & Commerce of Nebraska v. Hertz et al., Receivers................... 77, 640, 733 de Rothschild v. Sheffield, Trustee.............. 752 Dharandas Tulsidas v. Insular Collector of Customs. 258 Dier et al., Copartners, v. Banton, District Attorney. 147 Director General of Railroads, Ex parte.......... 274 Director General of Railroads v. Caldwell........ 743 Director General of Railroads v. Farmers Co-Operative Equity Co................................... 312 Director General of Railroads v. Hanlon..... 742, 762 Director General of Railroads v. Long, Admx...... 750 Dolan, Collector, New York, Philadelphia & Norfolk Tel. Co. v...........y........................... 748 Drennen, Receiver, Tilton v...................... 735 Duché, Taya’s Sons Co., Clmt., v................. 760 Duluth, Winnipeg & Pacific Ry., Beaton v......... 744 du Pont, Graham, Collector of Internal Revenue, v.. 234 Dychç, Warden, Riddle v.......................... 333 X TABLE OF CASES REPORTED. Page. Dyer v. Commonwealth of Massachusetts............ 751 Dyson, U. S. Marshal, Albury v................. 747 Eclipse Machine Co., Harley-Davidson Motor Co. v. 743 Edwards, Collector of Internal Revenue, Central Union Trust Co. of New York v................... 744 Edwards, Collector of Internal Revenue, v. Slocum.. 738 Edwards, Collector of Internal Revenue, Spalding & Bros, v.....................................'.... 66 Eickel, Bankrupt, v. Robinson, Trustee......... 754 Eighth Avenue R. R. v. Hedges, Receiver........ 736 El Paso & Northeastern R. R., City National Bank of El Paso v...................................... 695 Elvin Mechanical Stoker Co., Locomotive Stoker Co. v.......................................... 759 Engelhard & Sons Co. v. Mackenzie.............. 739 Erie R. R. v. Kirkendall....................... 740 Essgee Co. of China v. United States........... 151 Evangelical Lutheran Synod D. McKelvie......... 404 Ex parte Davis, Director General............... 274 Ex parte Fuller................................. 91 Ex parte Paleais............................... 727 Ex parte Rumsey..............................•... 734 Ex parte Taubel-Scott-Kitzmiller Co............ 729 Farmers Co-Operative Equity Co., Davis, Director General, v...................................... 312 Farmers Loan & Trust Co. of New York v. Wilcox County.......................................... 755 Farmers & Merchants Bank of Monroe v. Federal Reserve Bank of Richmond.......................’. 649 • Federal Reserve Bank of Atlanta, American Bank & Trust Co. v.................................. 643 Federal Reserve Bank of Richmond, Farmers & Merchants Bank of Monroe v...................... 649 Federal Trade Comm. v. Mennen Co............... 759 Feld, United States ex reL, v. Bullard, Major General .......................................... 760 TABLE OF CASES REPORTED. xi Page. First National Bank in Detroit, Rousso v....... 754 First National Bank in St. Louis v. State of Missouri ex rel. Barrett, Attorney General........ 732 First National Bank of San Jose v. State of California ........................................ 366 Firth, Graham, Chisholm & Co. v................ 753 Fitch, Lancaster et al., Receivers, v.......... 754 Flat Slab Patents Co., Turner v................ 752 Fook, Chung, v. White, Commr. of Immigration.... 740 Four-in-One Coal Co. v. Brown.................. 749 Fox v. United States........................... 756 Francis, Blatt v............................... 762 Friedlander Bros. v. City of Moultrie.......... 752 Frothingham v. Mellon, Secy, of Treasury........ 447 Fuller, Ex parte................................ 91 Galbreath Cattle Co., Great Northern Ry. v...... 740 Galveston, City of, Brush Electric Co. v........443 Galveston Causeway Constr. Co. v. Galveston, Harrisburg & San Antonio Ry.......................... 747 Galveston, Harrisburg & San Antonio Ry., Galveston Causeway Constr. Co. v..................... 747 Ganci, United States v......................... 755 Georgia Railroad Comm., Georgia Ry. & Power Co. v ................... J............7........ 625 Georgia Railroad Comm., Southern Bell Tel. & Tel. Co. ........................................... 761 Georgia Ry. & Power Co. v. Mayor & Council of City of College Park................................ 441 Georgia Ry. & Power Co. v. Town of Decatur......432 Georgia Ry. & Power Co. v. Railroad Comm, of Georgia......................................... 625 Gerdes, Trustee, v. Lustgarten............... 741 Gilchrist, President, State of New York ex rel. Clyde v............................................... 94 Glass, Hunt v............................... • • 746 Goldman, Receiver, v. McKey, Trustee............ 737 XII TABLE OF CASES REPORTED. Page. Goldwyn Pictures Corporation v. Howells Sales Co. 755 Gosho Co. v. Southern Pacific Co............... 742 Graham, Collector of Internal Revenue, v. du Pont.. 234 Graham, Chisholm & Co. v. Firth................ 753 Grainger & Co., Johnson, Trustee, v............ 749 Great Northern Ry. v. Galbreath Cattle Co....... 740 Greene, Trustee, Levinson v.................... 750 Greene, Trustee, Manhattan Investment Co. v..... 750 Gregg Grain Co., Walker Grain Co., Bankrupts, v... 746 Guaranty Title & Trust Corporation, Receiver, v. United States.................................. 733 Gulf Refining Co., United States v.........< • • • • 738 Gwinner, Hunt v................................ 746 Hamilton & Co., Sandusky Cement Co. v.......... 759 Hammaer v. United States....................... 727 Hammerschmidt v. United States................. 736 Hanclaire Trading Corp. v. United States........ 151 Hanlon, Davis, Director General, v......... 742, 762 Hanna, Missouri Pacific R. R. v................... 740 Harbison, Hunt v............................... 746 Hareford, Davis, Agent, v........................ 745 Harley-Davidson Motor Co. v. Eclipse Machine Co. 743 Hart v. Keith Vaudeville Exchange.............. 271 Hedges, Receiver, Eighth Avenue R. R. v........ 736 Hedges, Receiver, Ninth Avenue R. R. v......... 736 Henderson et al., Trading as Phoenix Paint & Varnish Co., United States, Owner, etc. v.............. 759 Henry, Executrix, Hunt v....................... 746 Hertz et al., Receivers, Department of Trade & Com- merce of Nebraska v...................... 77, 640, 733 Hillegass v. Rohm, Admx........................ 758 Holland America Line v. Mellon, Secy, of Treasury. 100 Hollowell, Olander v........................... 731 Hosey, St. Louis Southwestern Ry. v............ 757 Houbigant, Inc., Magnum Import Co. v... 159, 729, 738 Houston Coal Co. v. United States.............. 361 TABLE OF CASES REPORTED. xm Page. Houston Marine Engineering Works, Importers S. S. Co. v............................................ 751 Howells Sales Co., Goldwyn Pictures Corporation v. 755 Hughes v. United States Borax Co............ 753 Hunt v. Calvert............................... 746 Hunt v. Clapp................................. 746 Hunt v. Collingwood............................ 746 Hunt v. Glass.................................. 746 Hunt v. Gwinner............................... 746 Hunt v. Harbison................................ 746 Hunt v. Henry, Executrix..................... 746 Hunt v. Montgomery............................ 746 Hunt, Rudolph et al., Commrs., v................ 744 Hunt v. Theiss, Exr............................. 746 Importers S. S. Co. v. Houston Marine Engineering Works........................................... 751 Indiana, State of, Palmer v.................... 762 Industrial Accident Comm., California, Madera Sugar Pine Co. v................................. 499 Industrial Relations, Court of, Wolff Packing Co. v.. 522 Inks v. United States........................... 760 Insular Collector of Customs, Dharandas Tulsidas v. 258 International Life Ins. Co. v. Sherman.......... 346 International Mercantile Marine Co. v. Stuart, Collector of Customs......,....:................... 101 International Nav. Co. v. Mellon, Secy, of Treasury. 100 Interstate No. 1, Steam Tug, Bums Bros, v........ 753 Interstate Coal & Dock Co., Thosmil Holding Corporation v...................................... 751 Interstate Commerce Comm. v. State of Tennessee.. 318 Inter-State Iron Co. v. Lord.................... 172 Iowa, State of, Bartels v....................... 404 I. T. S. Rubber Co. v. United States Rubber Co... 748 Ivory Novelties Trading Co. v. Coty..... 159, 729, 738 James v. Davis, Agent........................... 752 Jay Burns Baking Co. v. McKelvie, Governor....... 728 XIV TABLE OF CASES REPORTED. Page. Jersawit, Trustee, State of New York v.......... 741 Johnson, Trustee, v. Grainger & Co.............. 749 Johnson, Governor of Chickasaw Nation, v. United States ex rei. McAlester-Edwards Co.... -........ 200 Jose Taya’s Sons Co., Clmt., v. Duche........... 760 Joslin v. City of Providence.................... 668 Joslin Mfg. Co. v. City of Providence........... 668 Karatz, Lion Bonding & Surety Co. v...... 77, 640, 733 Kansas Court of Industrial Relations, Wolff Packing Co. v.......................................... 522 Keith Vaudeville Exchange, Hart v..............271 Keller v. Adams-Campbell Co..................... 741 Kentucky Board of Charities & Corrections, Bromwell Brush & Wire Goods Co. v................... 753 Kentucky Finance Corporation v. Paramount Auto Exchange Corporation............................. 544 Kirkendall, Erie R. R. v......................... 740 Krivit v. United States......................... 750 Laiime & Partridge, Inc., Moses v............... 758 Lancaster et al., Receivers, v. Fitch........... 754 Leecraft v. Texas Co............................ 732 Lehigh & Hudson River Ry. v. Otterstedt..... 727, 747 Levinson v. Greene, Trustee..................... 750 Lilley Building & Loan Co. v. Miller, Collector.... 754 Lion Bonding & Surety Co. v. Karatz...... 77, 640,733 Liverpool, Brazil & River Plate Steam Nav. Co. v. Mellon, Secy, of Treasury....................... 100 Locomotive Stoker Co. v. Elvin Mechanical Stoker Co.............................................. 759 Lohmiller, Supt., Lyon v........................ 730 Loisel, U. S. Marshal, Collins v............ 426, 730 London & Lancashire Indemnity Co. v. Board of County Commrs., Columbiana County................ 755 Long, Admx., Davis, Director General v.......... 750 Lord, Bennett Mining Co. v..................... 172 TABLE OF CASES REPORTED. xv Page. Lord, Biwabik Mining Co. v...................... 172 Lord, Cleveland-Cliffs Iron Co. v............... 172 Lord, Inter-State Iron Co. v.................... 172 Lord, Mesaba-Cliffs Iron Mining Co. v........... 172 Lord, Oliver Iron Mining Co. v.................. 172 Lord, Republic Iron & Steel Co. v............... 172 Los Angeles, City of, v. Mono Power Co.......... 751 Los Angeles County, Rindge Co. v.................700 Los Angeles & Salt Lake R. R., Railroad Comm, of California v..................................... 737 Luskey, United States v.......................... 62 Lustgarten, Gerdes, Trustee, v.................. 741 L. Vogelstein & Co. v. United States............ 337 Lyndon, Wagner Electric Mfg. Co. v............... 226 Lyon v. Lohmiller, Supt....................... 730 McAlester-Edwards Co., United States ex rel. Work, Secy, of Interior, v............................. 200 McCampbell v. New York Life Ins. Co............. 759 McCarthy, U. S. Marshal, v. Amdstein............ 355 McGirr’s Sons Co. v. Pennsylvania R. R........... 743 McKelvie, Governor, Burns Baking Co. v.......... 728 McKelvie, Nebraska District of Evangelical Lu- theran Synod v.............................. 404 McKey, Trustee, Goldman, Receiver, v............ 737 McNulty v. Atchison, Topeka & Santa Fe Ry........ 746 MacKelvie v. Mutual Benefit Life Ins. Co......... 747 Mackenzie v. Engelhard & Sons Co................ 739 Maclen Import Co. v. Coty............... 159, 729,738 Madera Sugar Pine Co. v. Industrial Accident Comm., California................................ 499 Magnum Import Co. v. Coty.............. 159, 729, 738 Magnum Import Co. v. Houbigant, Inc.... 159, 729, 738 Manhattan Investment Co. v. Greene, Trustee...... 750 Massachusetts, Commonwealth of, Dyer v........ 751 Massachusetts, Commonwealth of, v. Mellon, Secy. of Treasury...................................... 447 51826°—23-------ii XVI TABLE OF CASES REPORTED. Page. Mattingly, Judge, Cleveland v................. 744 Mayhall & Neible, Union Stock Yards Co. of Omaha v..................................... 731, 757 Mayor and Council of City of College Park, Georgia Ry. & Power Co. v.............................. 441 Mellon, Secy, of Treasury, Compagnie Generale Transatlantique v.............................. 100 Mellon, Secy, of Treasury, Cunard S. S. Co. v... 100 Mellon, Secy, of Treasury, Frothingham v........447 Mellon, Secy, of Treasury, International Nav. Co. v............................................... 100 Mellon, Secy, of Treasury, Liverpool, Brazil & River Plate Steam Nav. Co. v......................... 100 Mellon, Secy, of Treasury, Commonwealth of Massachusetts v................................... 447 Mellon, Secy, of Treasury, Navigazione Generale Italiana v..................................... 100 Mellon, Secy, of Treasury, Netherlands-American Steam Nav. Co. v............................... 100 Mellon, Secy, of Treasury, Oceanic Steam Nav. Co. v........'...................................... 100 Mellon, Secy, of Treasury, Pacific Steam Nav. Co. v...............................:.............. 100 Mellon, Secy, of Treasury, Royal Mail Steam Packet Co. ........................................... 100 Mellon, Secy, of Treasury, United S. S. Co. of Copenhagen v........................................ 100 Mennen Co., Federal Trade Comm, v............. 759 Mesaba-Cliffs Iron Mining Co. v. Lord......... 172 Meyer v. State of Nebraska.................... 390 Middlebrooks, Sheriff, Bonner v............... 729 Milford, United States v....................... 65 Milheim v. Moffat Tunnel Improvement Dist....... 710 Miller, Alien Property Custodian, Ahrenfeldt v.... 60 Miller, Alien Property Custodian, Commercial Trust Co. of New Jersey v........................ 51 Miller, Collector, Lilley Building & Loan Co. v.... 754 TABLE OF CASES REPORTED. xvn Page. Miller, Alien Property Custodian, Schaefer et al., Trustees, v.................................... 760 Miller v. United States....................... 758 Miller, Alien Property Custodian, United States Trust Co. of New York, Admr., v................. 58 Missouri, State of, ex rel. Barrett, Attorney General, First National Bank in St. Louis v............. 732 Missouri, State of, ex rel. Southwestern Bell Tel. Co. v. Public Service Comm., Missouri.............• 276 Missouri Pacific R. R. v. Hanna................. 740 Missouri Pacific R. R. v. Morgan.............. 761 Missouri Public Service Comm., State of Missouri ex rel. Southwestern Beli Tel. Co. v........... 276 M. McGirr’s Sons Co. v. Pennsylvania R. R....... 743 Moffat Tunnel Improvement Dist., Milheim v...... 710 Mono Power Co., City of Los Angeles v......... 751 Montgomery, Hunt v............................ 746 Morales, Bianchi v............................. 170 Morgan, Missouri Pacific R. R. v.............. 761 Morris Fertilizer Co., Pemberton v................ 755 Morse Dry Dock & Repair Co. v. Coiinelly........ 756 Morse Dry Dock & Repair Co. v. Danielson, an Infant ........................................ 756 Morse Dry Dock & Repair Co. v. Warren, Admx... 756 Moses v. Lalime & Partridge, Inc.............. 758 Mossel, United States v........................ 65 Moultrie, City of, Friedlander Bros, v........ 752 Murray v. United States...................... 757 Mutual Benefit Life Ins. Co., MacKelvie v....... 747 Nashville, Chattanooga & St. Louis Ry. v. State of Tennessee...................................... 318 National Surety Co. v. Childs, Trustee....... 758 Navigazione Generale Italiana v. Mellon, Secy, of Treasury....................................... 100 Nebraska, State of, Meyer v................... 390 Nebraska Department of Trade & Commerce v. Hertz et al., Receivers.................. 77, 640, 733 XVIII TABLE OF CASES REPORTED. Page. Nebraska District of Evangelical Lutheran Synod v. McKelvie......................................... 404 Netherlands-American Steam Nav. Co. v. Mellon, Secy, of Treasury............................... 100 Newark, City of, v. State of New Jersey........ 192 New Jersey, State of, City of Newark v......... 192 New Jersey, State of, City of Trenton v........ 182 New River Collieries Co., United States v.......341 New York, City of, Begg et al., Receivers, v.... 196 New York, State of, ex rei. Clyde v. Gilchrist, President ............................................ 94 New York, State of, v. Jersawit, Trustee....... 741 New York, State of, Taggart^ Paper Co. v........ 731 New York Central R. R. v. Cuddeback, Admx..... 757 New York Life Ins. Co., McCampbell v........ 759 New York Life Ins. Co. v. Rutherford......... 745 New York Life Ins. Co. v. Slocomb............ 745 New York, Philadelphia & Norfolk Tel. Co. v. Dolan, Collector....................................... 748 New York Public Service Comm. v. New York Tel. Co...............:............................... 43 New York State Tax Commission, State of New York ex rei. Clyde v.................................. 94 New York Tel. Co.. Prendergast v................ 43 Nichols, Atchison, Topeka & Santa Fe Ry. v...... 737 Ninth Avenue R. R. v. Hedges, Receiver......... 736 Norfolk Southern R. R. v. Daughton, Commr. of Revenue.......................................... 413 North Carolina, State of, Campbell v........... 728 Oceanic Steam Nav. Co. v. Mellon, Secy, of Treasury. 100 O’Hara, Davis, Agent, v....................... 741 Ohio, State of, Bohning v...................... 404 Ohio, State of, Pohl v......................... 404 Ohio, State of, v. State of West Virginia... 553, 623 Oklahoma, State of, v. State of Texas....... 505, 724 Oklahoma, State of, United States v............ 734 Olander v. Hollowell.............>............. 731 TABLE OF CASES REPORTED. xix Page. Oliver Iron Mining Co. v. Lord................... 172 Olney, City of, Campbell v....................... 352 Olsen, U. S. Attorney, Board of Trade of Chicago v.. 1 Otterstedt, Lehigh & Hudson River Ry. v....... 727, 747 Pacific Steam Nav. Co. v. Mellon, Secy, of Treasury. 100 Paleais, Ex parte................................ 727 Palmer v. State of Indiana....................... 762 Panzich v. United States......................... 749 Paramount Auto Exchange Corporation, Kentucky Finance Corporation v............................ 544 Pemberton v. Morris Fertilizer Co................ 755 Pennsylvania, Commonwealth of, v. State of West Virginia...................................... 553, 623 Pennsylvania R. R., McGirr’s Sons Co. v.......... 743 Perkins Glue Co. v. Standard Furniture Co......... 752 Phipps v. Chicago, Rock Island & Pacific Ry......... 762 Phoenix Paint & Varnish Co., United States, Owner, etc. v......................................... 759 Platt v. Francis................................. 762 Pohl v. State of Ohio............................ 404 Porges v. Sheffield, Trustee..............7...... 752 Prendergast v. New York Tel. Co................... 43 Providence, City of, Joslin v.................... 668 Providence, City of, Joslin Mfg. Co. v........... 668 Providence, City of, Scituate Light & Power Co. v.. 668 Public Service Comm., Missouri, State of Missouri ex rel. Southwestern Bell Tel. Co. v................ 276 Public Service Comm, of New York v. New York Tel. Co.............................................. 43 Public Service Comm, of West Virginia, Bluefield Water Works & Imp. Co. v......................... 679 Puget Sound Power & Light Co. v. City of Seattle.. 743 Rachmil v. United States......................... 751 Railroad Comm, of California v. Atchison, Topeka & Santa Fe Ry.................................... 737 XX TABLE OF CASES REPORTED. Page. Railroad Comm, of California v. Los Angeles & Salt Lake R. R...................................... 737 Railroad Comm, of California v. Southern Pacific Co. 737 Railroad Comm, of Georgia, Georgia Ry. & Power Co. v.......................................... 625 Railroad Comm, of Georgia, Southern Bell Tel. & Tel. Co. v.................................... .. 761 Randall v. Board of Commrs., Tippecanoe County .. 734 Raton, City of, Raton Water Works Co. v........ 761 Raton Water Works Co. v. City of Raton......... 761 Republic Iron & Steel Co. v. Lord.............. 172 Rice Constr. Co., Brown-Crummer Co. v.......... 742 Riddle v. Dyche, Warden........................ 333 Rindge Co. v. Los Angeles County.............. 700 Robertson, Commr. of Patents, American Steel Foundries v.................................... 209 Robinson, Trustee, Eickel, Bankrupt v.......... 754 Rohm, Admx., Hillegass v....................... 758 Rorer’s Admr., Blair v......................... 734 Rothschild v. Sheffield, Trustee............... 752 Rousso v. First National Bank in Detroit....... 754 Royal Mail Steam Packet Co. v. Mellon, Secy, of Treasury...............;.................. 100 Rudolph et al., Commrs., v. Hunt............... 744 Rumsey, Ex parte............................. 734 Russell v. Seargeant, Trustee.................. 762 Rutherford, New York Life Ins. Co. v......... .'... 745 St. Louis Southwestern Ry. v. Hosey............ 757 St. Louis Southwestern Ry. v. United States..... 70 Sandusky Cement Co. v. Hamilton & Co........... 759 Sanguinetti v. United States................... 727 Sarja, Swanson v............................... 754 Scandinavian American Line v. Mellon, Secy, of Treasury......................................... 100 Schaefer et al., Trustees, v. Miller, Alien Property Custodian...................................... 760 Schlecht, Yuma County Water Users’ Assn, v..... 138 TABLE OF CASES REPORTED. xxi Page. Schliefer v. United States....................... 756 Schutz v. Wardell, Collector of Internal Revenue.. 761 Schwarz, Bennett, Supt., v....................... 757 Scituate Light &' Power Co. v. City of Providence... 668 Scroggins, Davis, Agent, v....................... 734 Seaboard Air Line Ry. v. Daughton, Commr. of Revenue........................................... 413 Seargeant, Trustee, Russell v.................... 762 Seattle, City of, Puget Sound Power & Light Co. v. 743 Sheffield, Trustee, de Rothschild v.............. 752 Sheffield, Trustee, Porges v..................... 752 Sherman, International Life Ins. Co. v........... 346 Silverman, Sunrise Pictures Corporation v......... 758 Simplex Electric Heating Co., American Steel Foundries v....................................... 209 Sischo, United States v.......................... 165 Slocomb, New York Life Ins. Co. v................ 745 Slocum, Edwards, Collector of Internal Revenue, v. 738 Sonneborn Bros. v. Cureton, Attorney General...... 506 Southern Bell Tel. & Tel. Co. v. Railroad Comm, of Georgia........................................... 761 Southern Pacific Co., Gosho Co. v................742 Southern Pacific Co., Railroad Comm, of California v................................................. 737 Southern Ry. v. Daughton, Commr. of Revenue.......413 South Utah Mines and Smelters v. Beaver County.. 325 Southwestern Bell Tel. Co., State of Missouri ex rel., v. Public Service Comm., Missouri................ 276 Spalding & Bros v. Edwards, Collector of Internal Revenue............................................ 66 Stager v. United States.......................... 728 Standard Furniture Co., Perkins Glue Co. v.......752 State Board of Charities & Corrections, Kentucky, Bromwell Brush & Wire Goods Co. v................ 753 State Tax Comm, of New York, State of New York ex rel. Clyde v............-...................... 94 Steam Tug Interstate No. 1, Burns Bros, v......... 753 xxn TABLE OF CASES REPORTED. Page. Steam, Collector of Internal Revenue, Weiss v...... 736 Stevens v. Arnold et al., Exrs.................. 266 Stuart, Collector of Customs, International Mercan- tile Marine Co. v.....................•........;. 101 Stuart, Collector of Customs, United American Lines v......................................... 101 Sunrise Pictures Corporation v. Silverman........ 758 Swanson v. Sarja................................ 754 Taggarts Paper Co. v. State of New York......... 731 Taubel-Scott-Kitzmiller Co., Ex parte............. 729 Tax Commission of New York, State of New York ex rei. Clyde v................................... 94 Taya’s Sons Co., Clmt., v. Duche................ 760 Tennessee, State of, Nashville, Chattanooga & St. Louis Ry. v...................................... 318 Tennessee, State of, United States v............ 318 Texas, State of, State of Oklahoma v........ 505, 724 Texas Co., Leecraft v........................... 732 Theiss, Exr., Hunt v.......................✓.... 746 Thosmil Holding Corporation v. Interstate Coal & Dock Co.......................................... 751 Tilton v. Drennen, Receiver..................... 735 Tippecanoe County, Board of Commrs., Randall v.. 734 Tisi, alias Cortina, United States ex rei., v. Tod, Commr. of Immigration............................ 735 Tod, Commr. of Immigration, United States ex rei. Tisi, alias Cortina, v........................... 735 Trenton, City of, v. State of New Jersey........ 182 Tulsidas v. Insular Collector of Customs........ 258 Turner v. Flat Slab Patents Co.................. 752 Union Stock Yards Co. of Omaha v. Mayhall & Neible...................................... 731,757 United American Lines v. Stuart, Collector of Customs......................................... 101 United States, Intervener, State of Oklahoma v. State of Texas.................................... 505,724 TABLE OF CASES REPORTED. xxm Page. United States, Agnello v.......................... 738 United States v. American Linseed Oil Co.......... 371 United States, Atwater & Co. v.................... 495 United States, Baldini v.......................... 749 United States, Baron v............................ 749 United States, Bell v............................. 744 United States, Bookbinder v..................... 748 United States ex rel. Feld v. Bullard, Major General. 760 United States, Curtis, Collins & Holbrook Co. v... 215 United States, Delaney v.......................... 742 United States, Essgee Co. of China v............. 151 United States, Fox v.............................. 756 United States v. Ganci............................ 755 United States, Guaranty Title & Trust Corporation, Receiver, v..................................... 733 United States v. Gulf Refining Co................. 738 United States, Hammaer v.......................... 727 United States, Hammerschmidt v................. 736 United States, Hanclaire Trading Corp, v.......... 151 United States, Owner, etc. v. Henderson et al., Trad- ing as Phoenix Paint & Varnish Co................. 759 United States, Houston Coal Co. v................ 361 United States, Inks v............................. 760 United States, Krivit v........................... 750 United States v. Luskey............................ 62 United States v. Milford........................... 65 United States, Miller v........................... 758 United States v. Mossel............................ 65 United States, Murray v........................... 757 United States v. New River Collieries Co.......... 341 United States v. State of Oklahoma................ 734 United States, Panzich v.......................... 749 United States, Rachmil v........................ 751 United States, St. Louis Southwestern Ry. v..... 70 United States, Sanguinetti v...................... 727 United States, Schliefer v........................ 756 United States v. Sischo........................... 165 XXIV TABLE OF CASES REPORTED. Page. United States, Stager v......................... 728 United States v. State of Tennessee............. 318 United States ex rel. Tisi, alias Cortina, v. Tod, Commr. of Immigration............*.............. 735 United States, Vogelstein & Co. v............... 337 United States, Willard, Sutherland & Co. v......489 United States, Windsor v........................ 748 United States ex rel. McAlester-Edwards Co., Work, Secy, of Interior, v............................ 200 United States, Zucker v......................... 756 United States Borax Co., Hughes v............... 753 United States Fidelity & Guaranty Co. v. Blake... 748 United States Rubber Co., I. T. S. Rubber Co. v.. 748 United States Trust Co. of New York, Admr. v. Miller, Alien Property Custodian................. 58 United S. S. Co. of Copenhagen v. Mellon, Secy. of Treasury...................................... 100 Vogelstein & Co. v. United States.............. 337 Vulcanite Roofing Co. v. Commonwealth S. S. Co.. 742 Wagner Electric Mfg. Co. v. Lyndon.............. 226 Walker, Collector of Internal Revenue, Cullinan v.. 134 Walker Grain Co., Bankrupts, v. Gregg Grain Co.... 746 Wardell, Collector of Internal Revenue, Schutz v... 761 Warren, Admx., Morse Dry Dock &' Repair Co. v.. 756 Weiss, Collector of Internal Revenue, v. Stearn.... 736 Weiss, Collector of Internal Revenue, v. White.... 737 Western Union Tel. Co. v. Czizek................ 739 West Virginia, State of, State of Ohio v.... 553,623 West Virginia, State of, Commonwealth of Pennsylvania v. 553, 623 West Virginia Public Service Comm., Bluefield Water Works & Imp. Co. v.............................. 679 White, Commr. of Immigration, Chung Fook v.... 740 White, Weiss, Collector of Internal Revenue, v.. 737 Wilcox County, Farmers Loan & Trust Co. of New York v.........,................................ 755 TABLE OF CASES REPORTED. xxv Page. Willard, Sutherland & Co. v. United States.... 489 William C. Atwater & Co. v. United States.....495 Windsor v. United States..................... 748 W. M. Rice Constr. Co., Brown-Crummer Co. v.... 742 Wolff Packing Co. v. Court of Industrial Relations, Kansas....................„................... 522 Work, Secy, of Interior, v. United States ex rel. McAlester-Edwards Co.......................... 200 Young Men’s Christian Assn, of Columbus v. Davis...................................... 739, 745 Yuma County Water Users’ Assn. v. Schlecht.... 138 Zucker v. United States...................... 756 TABLE OF CASES Cited in Opinions Page. Page. Abby Dodge, The, 223 U. S. American Smelting Co. v. 166 129 Colorado, 204 U. S. 103 732 Abilene Natl. Bank v. Dolley, American Steel & Wire Co. v. 228 U. S. 1 659 Speed, 192 U. S. 500 509,512, Adams v. Russell, 229 U. S. . 514,515,519 353 96 American Sugar Refg. Co. v. Adams v. Tanner, 244 U. S. . New Orleans, 181 U. S. 277 230 590 399 402 American Trading Co. v. Adirondack Ry. v. New York, . Monserrat 18 P. R. 268 171 176 U. S. 335 677,678 AnTcTh°r G1JnCo- v‘ Gray’ 256 Adkins v. Children’s Hospital, . j • „ . z^0 261 U. S. 525 399,534 Anderson v Forty-two Broad- Ahrenfeldt v. Miller, 282 Fed. . 2?? 944 ’ 6Q Ann, The, 1 Fed. Cas., p. 926 122 Alabama v. Burr, 115 U. S. Appleton Water Works Co v. Railroad Comm., 154 2110 . Wis. 121 300 Alabama & Vicksburg Ry. v- Arizona Employers’ Liability Journey 257 U. S 111 316 Cases> g 400 502 V' Bush Oo., 182 N. Y. Arkadelphia Milling Co. v. t • - TT 504 St. Louis S. W. Ry., 249 Allgeyer v. Louisiana, 165 U. u g 134 179 8- 578 399 Arkansas Natural Gas Co. v. Amarillo v. Southwestern Tel. Arkansas R. R. Comm., 261 Co., 253 Fed. 638 51 U. S. 379 331,439,676 American Banana Co. v. Arkansas Rate Cases, Re, 187 United Fruit Co., 213 U. S. Fed. 290 48 347 123 Armour Packing Co. v. Lacy, American Bank & Trust Co. 200 U. S. 226 354. v. Federal Reserve Bank, Armstrong Co. v. New York 256 U. S. 350 643,644,648, Cent. R. R., 129 Minn. 104 315 . 652,657 Arndstein v. McCarthy, 254 American Bank & Trust Co. U. S. 71, 379 356-358,361 v. Federal Reserve Bank, Asher v. Texas, 128 U. S. 129 515 280 Fed. 940; 284 Fed. 424 643, Askren v. Continental Oil Co., 645 252 U. S. 444 506,516-520 American Column Co. v. Assessors, The, v. Osbornes, United States, 257 U. S. 9 Wall. 567 230 377 371,388,389 Atchison, T. & S. F. Ry. v. American Express Co. v. Love, 174 Fed. 59; 177 Fed. Iowa, 196 U. S. 133 514,515 493 50 American Natl. Bank v. Mil- Atchison, T. & S. F. Ry. v. ler, 229 U. S. 517 216,223 Vosburg, 238 U. S. 56 550 xxvn XXVIII TABLE OF CASES CITED. Page. Page. Atherton Mills v. Johnston, Bell v. Windsor & Annapolis 259 U. S. 13 611 Ry., 24 N. S. 521 699 Atkins & Co. v. Moore, 212 Bell’s Gap R. R. v. Pennsyl- Ü. S. 285 214,215 vania, 134 U. S. 232 417 Atlantic Coast Line R. R. v. Bernheimer v. Converse, 206 Interstate Com. Comm., U. S. 516 86 194 Fed. 449 48 Blacklock v. Small, 127 U. S. Atlantic Cotton Mills v. In- 96 230,642 dian Orchard Mills, 147 Blair v. Chicago, 201 U. S. Mass. 268 223 400 648 Atwater & Co. v. United Blake v. McClung, 172 U. S. States, 56 Ct. Clms. 458 495 239 317,550,552 Avon v. Detroit United Ry., Blake Co. v. United States, 257 U. S. 618 192 275 Fed. 861 343 Ayres v. Wiswall, 112 U. S. Blanset v. Cardin, 256 U. S. 187 330 319 730 Baccus v. Louisiana, 232 U. S. Block v. Hirsh, 256 U.' S. 334 516 135 534,536,542 Bacon v. Illinois, 227 U. S. Bluefield v. Water Works Co., 504 33,509 81 W. Va. 201 688 Bacon v. Rutland R. R., 232 Bluefield Water Works Co. v. U. S. 134 48,616 Public Service Comm., 262 Bailey v. George, 259 U. S. U.S.679 303,634,635,637,638 16 255 Bluefield Water Works Co. v. Baldwin Co. v. Howard Co., Public Service Comm., 89 256 U. S. 35 214,215 W. Va. 736 680,688 Balt. & Ohio R. R. v. Rail- Board of Education v. Aber-road Comm., 196 Fed. 690 48 deen, 56 Miss. 518 188 Bank of America y. Whitney Bodkin v Edwards 255 U. S. Cent. Natl. Bank, 261U. S. 221 146 _ ~ ... . . 318 Boom Co. v. Patterson, 98 Bank of California v Rich- n s 403 340,344,678 ardson, 248 U. S 476 370 Bos^e Comingore, 177 U. S. Bank of New Milford v. 35g Town of New Milford, 36 Boston Chamber of Com-Conn. 93 223 merce v. Boston, 217 U. S. Bank of The Republic v. Mil- ion 245 lard, 10 Wall. 152 660 n ° , -n • 1 , ~ T) 1 /~\ Ji o rw O'TA Bostwick v • Brinkerhoii, 106 •Banks v. Ogden, 2 Wall. 57 270 Ti a q w Bardon v. Land & River u. ©. ö Imp. Co., 157 U. S. 327 354 n ^tinental Oil Barnes v. District of Colum- Co-’ 256 U’ S- 642 bia, 91 U. S. 540 187 _ , TT , , +516’ Barrell v. Tilton, 119 U. S. States’ 116 637 330 U. 616 158 Basset v. United States, 9 Brabston v. Gibson, 9 How. WaU. 38 330 m t? k + 17g tt 660 Bassing v. Cady, 208 U. S. v’ Roberts’ 175 U- 386 429 8-291 486 Bay State Rate Case, P. U. Bragg v. Weaver, 251 U. S. R. 1916 F, 221 . 302 57 677,678,709 Begg v. New York City, 262 Bransford v. Regal Shoe Co., U. S. 196 736 237 Fed. 67 494 TABLE OF CASES CITED. xxix Page. , Page. Branson v. Bush, 251 U. S. Butterworth v. Hoe, 112 U.S. 182 721 50 213 Brantman v. Canby, 119 Buttfield v. Stranahan, 192 Minn. 396 191 U. S. 470 125 Brass v. Stoeser, 153 U. S. Byers v. McAuley, 149 U. S. 391 534,535 608 90 Brennan v. Titusville, 153 U. Caldwell v. North Carolina, S. 289 515 187 U. S. 622 515 Brewer-Elliott Oil Co. v. Caldwell Land Co. v. Smith, United States, 260 U. S. 151 N. C. 70 425 77 146 California v. Central Pac. R. Brimmer v. Rebman, 138 U. R., 127 U. S. 1 370 8.78 514,597 California v. Southern Pacific Brodnax v. Missouri, 219 U. Co 157 TT S 229 617 8. 285 42 Callaghan v. Union Pacific R. Brolan v. Umted States, 236 148 Minn. 482 315 U. S. 216 125 Campbell v. United States, Brookings State Bank v. Fed- 107 U. S. 407 74 X' Fe(h Campbell v. United States, 430 ; 281 Fed. 222 657 224 U. S. 99 47 Brooks-Scanlon Co. y Rail- Canadian Northern Ry. v. road Comm., 251 U. S. 396 Eggen, 252 U. S. 553 317,551 -D tt -i i $43 Capital City Dairy Co. v. Bromi v. Houston 114 U. S. Ohio, 183 U. S. 238 178,602 622 509,511,512,519 Carlo Poma, The, 255 U. S. Brown y. Maryland, 12 219 230 Wheat. 419 509-514,522 Carnegie Natural Gas Co. v. Brown u Sait Lake City, 33 Swiger,. 72 W. Va. 557 606 utan, 222 191 Carolina Glass Co. v. South Brown v. Walker, 161 U. S. Carolina, 240 U. S. 305 230 n m tno rr Cator v. Southern Pac. Co., 6 Browne v. Turner, 176 Mass. I C C 113 324 ■Rrnwnw., .. oqq’719 Cedar Rapids Gas Co. v. Browning v. Waycross, 233 Cedar 223 U. S. 655 305, BrÜh Etetrie Co. v. Calves- r . |T . 310,446,632,693 ton, (Dist. Ct.), affd. 262 «R9 U S 143 694 Dakota, 226 U. S. 157 661,662 Brushaber v. Union Pac. R. Central Pacific Ry v. Feld-r 240 U S 1 257 man, 152 Cal. 303 707 Budd v. New York, 143 U S Central Union Trust Co. v. 517 ’ 534 535 Garvan, 254 U. S. 554 52, Budd v. New York, 117 N. Y.’ 53> 56> 61>171 1 535 Central Union Txust Co. v. Bullock v. Railroad Comm., Wendell, 197 App. Div. 254 U.S. 513 543 131 . 96,99 Bunday v. Huntington, 224 Chambers v. Balt. & Ohio R. Fed. 847 494 R-, 207 U. S. 142 . 317 Butchers’ Union Co. v. Cres- Charleston v. Public Service cent City Co., Ill U. S. 746 399 Comm., 86 W. Va. 536 688 Butler v. Lewiston, A. & W. Charter Oak Life Ins. Co. v. St. Ry., P, U. R. 1916 D, 25 303 Sawyer, 44 Wis. 387 550 xxx TABLE OF CASES CITED. • Page. Page. Cheatham v. United States, Coal & Coke Co. v. Public 92 U. S. 85 254 Serv. Comm., 84 W. Va. Cherokee Nation v. Georgia, 662 688 5 Pet. 1 483,485 Cobb v. Davenport, 32 N. J. Ches. & Ohio Ry. v. McCabe, L. 369 185 213 U. S. 207 437 Coe v. Errol, 116 U. S. 517 509, Chicago v. Chicago Rys., 257 596 U. S. 617 192 Cold Blast Transp. Co. v. Chicago v. Dempcy, 250 U. S. Kansas City Bolt Co., 114 651 192 Fed. 77 493 Chicago Board of Trade v. Collingswood v. Water-Sup- Christie Grain & Stock Co., ply Comm., 84 N. J. L. 104 185 198 U. S. 236 33,36 Collins v. Loisel, 259 U. S. Chicago Board of Trade v. 309 428,431 United States, 246 U. S. Collins v. Müler, 252 U. S. 231 33 364 . 358,427 Chicago, Burl. & Q. R. R. v. Columbia Ry. Gas & Elec McGuire, 219 U. S. 549 399,661 f0 v. South Carolina, 261 Chicago, MÜ. & St. P. Ry. v. ~ f1- »•. 236 439 Minnesota, 134 U. S. 418 290 Columbia Water Power Co. v. Chicago, Mü. & St. P. R. R. ^leC- St‘ Ry” Q7 v. Wisconsin, 238 U. S. 491 289 r 172 U’ P: V? + i A m + 97 Chicago Rys. v. Illinois Commercial Mutual Accident Comm., 277 Fed. 970 49 r Co’ v- U. 8. 245 318 . T» T p -D „ t> , Commercial Trust Co. v. Mil- Chicago, R I & Pac Ry, ler> 262 n g 51 58-61 Ex parte, 255 U. S. 273 7 commercjai Trust Co. v. Mü- Chicago Title & Trust Co. v. ler> 281 Fed 804 52 Bashford, 120 V i> 281 550 commissioners Lucas, 93 Chipman, Ltd v Thomasi B. v g W8 i88> 190 J^y P- Commonwealth v. Rice, 216 Chisholm v. Georgia, 2 Dall Mass. 480 429 Commutation Rate Case, 21 Choctaw, Okla. & Gull R. R. j ç q 42g 324 v. Harrison, 235 U. S. 292 370 Connecticut Mutual Life Ins. Church v. Hubbart, 2 Cr. Co. Spratley, 172 U. S. !87 ? 122 602 318 Citizens Bank v. Cannon, Consolidated Turnpike Co. v. 164 U. S. 319 642 Norfolk, etc., Ryt, 228 U. S. City Natl. Bank v. El Paso 326 731 & N. E. R. R, 225 S. W. Consolidated Turnpike Co. v. 391 696,697,699 Norfolk, etc., Ry., 228 U. S. Civü Rights Cases, 109 U. S. 596 730 3 540 Converse v. Hanrilton, 224 Claiborne County v. Brooks, U. S. 243 . 86 111 U. S. 400 438 Cook v. Pennsylvania,*97 U. Clark v. Nash, 198 U. S. 361 536 S. 566 510 Clarksburg Light Co. v. Pub- Cook v. Port of Portland, 20 lie Service Comm., 84 W. Oreg. 580 718 Va. 638 606 Cooper, In re, 143 U. S. 472 276 Clyde v. Wendell, 197 App. Cornell v. Coyne, 192 U. S. Div. 913; 232 N. Y. 550 95 418 69,70,179 Coal & Coke Ry. v. Conley, County of Mobüe v. Kimball, 67 W. Va. 129 689 102 U. S. 691 674 TABLE OF CASES CITED. xxxi Page. ‘ Page. Court Industrial Relations v. Davis v. Wakelee, 156 U. S. Wolff Packing Co., Ill 680 426 Kans. 501 523,543 Dawson v. Kentucky Distil- Covell v. Heyman, 111 U. S. leries Co., 255 U. 8. 288 177,426 176 90 De Ganay v. Lederer, 250 U. Covington v. First Natl. 8. 376 420 Bank, 198 U. 8. 100 370 Del., Lack. & W. R. R. v. Covington v. Kentucky, 173 Yurkonis, 238 U. 8. 439 178, U. S. 231 188 179,736 Covingtön Turnpike Co. v. Deming v. Carlisle Packing Sandford, 164 U. S. 578 290,550 Co., 226 U. 8. 102 233,273 Cox v. Philadelphia, etc., R. Denny v. Bennett, 128 U. 8. R., 215 Pa. St. 506 675 489 659 Coy, In re, 127 U. S. 731 335 Denver v. Denver Union Crampton v. Zabriskie, 101 Water Co., 246 U. S. 178 287 U. S. 601 486 Department of Trade & Crenshaw v. Arkansas, 227 Commerce v. Hertz, 260 U. S. 389 515 U. S. 696 85 Crescent Cotton Oil Co. v. Derinza’s Case, 229 Mass. 435 503 Mississippi, 257 U. S. 129 179 Des Moines Gas Co. v. Des Crew Levick Co. v. Pennsyl- Moines, 238 U. S. 153 310, vania, 245 U. S. 292 69,515 3D 532 693 Cripple Creek Water Co., P. Detroit v. Detroit Citizens’’ U. R. 1916 C, 788 303 St. Ry., 184 U. S. 368 438 V’ KruPP> 224 U. S. Detroit United Ry. v. Michi- o aa i>++- , mna 077 gan, 242 U. S. 238 97,439 Pe^loner» S- Dewey Land Co. v. Stevens, r k 1 j m . n T 336 83 N. J. Eq. 314; id. 656; Cumberland Tel. Co. v. Lou- 85 N j Eq 374 268-270 oo9nv Diamond’s Estate, In re, 259 283 Fed. 215 47,49,50 7n ’ fi42 Cunard S. S. Co. v. Mellon, „ On 284 Fed. 890 103,121 D + “°™ ^atch Co. v. On- Cuyahoga River Power Co. v. n- £ T to 97Q Northern Realty Co., 244 Co’’ In re’ 279 Fed' 147 U.S. 300 96 -nJ nu TT a ' Dahnke-Walker Co. v. Bon- Dod|e v' Osborn’ 240 U- S-durant, 257 U. S. 282 514, *iö „ . . 597 710 Dmovan v. Pennsylvania Dairvmen’s Sunnlv Co J Co., 199 U. S. 279 719 PeSvaJa R yR. L Doss v. Tyack, 14 How 297 330 C. C. 406 324 D°V Beldelman> 125 U- S' Danbury v. Danbury & . .. , TT « 3Uy Bethel Gas Co., P. U. R. Dozier v- Alabama, 218 U. S. 1921 D, 193 300 124 515 Dane v. Jackson, 256 U. 8. Duluth Street Ry. v. Rail-589 331 road Comm., P. U. R. 1915 Darlington v. City of New D. 211 299 York, 31 N. Y. 164 188 Earle v. Commonwealth, 180 Davidson v. New Orleans, Mass. 579 677 96 U. S. 97 674 East Hartford v. Hartford Davis v. Elmira Savings Bridge Co., 10 How. 511 188, Bank, 161 U. S. 275 369,370 190 51826°—23-----------III xxxn TABLE OF CASES CITED. Page. ' Page. East Jersey Water Co. v. Farmers & Mechanics Sav- Board of Conservation, 91 ings Bank v. Minnesota, N. J. L. 448 193 232 U. S. 516 370 Easton v. Iowa, 188 U. S. Farmers & Merchants Bank 220 369,370 v. Federal Reserve Bank, Eberhard v. Northwestern 261 U. S. 610 653 Mutual Life Ins. Co., 241 Farmers’ & Merchants’ Bank Fed. 353 86 v. Federal Reserve Bank, Edgewood v. Wilkinsburg, 286 Fed. 610 657 etc., St. Ry., 258 U. S. 604 192 Farmers & Merchants Bank Eisner v. Macomber, 252 U. v- Federal Reserve Bank, S. 189 ' 135,137 183 N. C. 546 651/653 Ela v. American Merchants’ Famcomb v. Denver, 252 Express Co., 29 Wis. 611 699 U. S. 7 724 Ellerman v. McMains, 30 La. Farrell v. O’Brien, .199 U. S. Ann. 190 188 89 347,730,731 Emert v. Missouri, 156 U. S. Fay Crozet, 217 U. S. 455, 347 296 516 Federal Baseball Club v. Na- Empire State-Idaho Min. Co. tional League, 259 U. S. 200 v. Hanley, 205 U. S. 225 730, , 271,273,274 731 Federal Land Bank v. Cros- Equitable Life Assur. Soc. v. _ ^nd, 261 U. S. 374 99 Brown, 187 U. S. 308 273, Federal Trade Comm v Srn- 730 732 clair Refg. Co., 261 U. S. Erie R. R. v. Public Utility 463 „ x. . 389 Commrs., 254 U. S. 394 290 Fergus, Petitioner, 30 Fed. Eschner v. Pennsylvania R. 607 429 R., 18 I. C. C. 60 324 Field v. Southern Ry., 13 I. Essanay Film Mfg. Co. v. C. C. 298 3^4 Kane, 258 U. S. 358 90 Filor v. United States, 9 Essex Public Road Board v. _. Walk 45 _ , ... . . ^44 Skinkle, 140 U. S. 334 188 First Natl Bank v. Albright, Eureka Pipe Line Co. v. Hal- _,268 U. ,®"t^48 ta l lanan, 257 U. S. 265 2,34 First Natl. Bank v. Dunbar, Exchange, The, 7 Cr. 116 124 118 111. 625 223 Ex parte 74, 58 I. C. C. 220 320 Fitzgerald v. First Natl. Fair, The, v. Kohler Die Co., Bank, 114 Fed. 474 493 228 U S 22 273 Five Tracts of Land v. Fairchild v. Hughes, 258 U. S. United States, 101 Fed. 126 484,611 661 345 Fallbrook Irrig. Dist. v. Florida tn Anderson, 91 U. S. Bradley, 164 U. S. 112 706, 667 482 707 709,717,721 Floyd Acceptances, The, 7 Farez, In re, 7 Blatc’hf. 345 429 Wall. 666 144 Fargo v. Michigan, 121 U. S. Forbes v. Gracey, 94 U. S. 230 515 762 332 Farmers Co-Operative Co. v. Foster v. People, 18 Mich. Payne, 150 Minn. 534 313,314 266 358,359 Farmers’ L. & T. Co. v. Lake Fouche v. Merchants Natl. Street Elev. R. R., 177 U. Bank, 110 Ga. 827 223 S. 51 89 Frank v. Mangum, 237 U. S. Farmers’ & Mechanics’ Natl. 309 335,336 Bank v. Dearing, 91 U. S. Freeport Water Co. v. Free-29 369,370 port City, 180 U. S. 587 438 TABLE OF CASES CITED. xxxm Page. Page. French v. Barber Asphalt Georgia Ry. & Power Co. v. Co., 181 U. S. 324 354 Railroad Comm., 149 Ga. 1 437 Freund v. United States, 260 German Alliance Ins. Co. v. U. S. 60 76 Lewis, 233 U. S. 389 534, Frothingham v. Mellon, 288 535,538 Fed. 252 448 Gibbs v. Diekma, 131 U. S. Fuller, Ex Parte, 262 U. S. Appdx. clxxxvi 233 91 150 Giles v. Harris, 189 U. S. Gagliardi, Ex parte, 284 Fed. 475 610,623 190 430 Giménez v. Brenes, 10 P. R. Gaines v. Thompson, 7 Wall. 124 172 347 488 Glaser, In re, 198 U. S. 171 162 Galveston Elec. Co. v. Gal- Goddard v. Ordway, 101 U. veston, 258 U. S. 388 287, S. 745 330 296,297,303,311,446,632-634 Golden Cycle Co. v. Rapson Galveston, H. & S. A. Ry. v. Coal Co., 188 Fed. 179 493 Texas, 210 U. S. 217 416,515 Goodrich v. Ferris, 214 U. S. Gandy v. Marble, 122 U. S. 71 347 432 212,214,215 Gordon, Ex parte, 104 U. S. Garvan v. Commercial Trust 515 276 Co., 275 Fed. 841 61 Gouled v. United States, 255 Gas & Electric Sec. Co. v. U. S. 298 158 Manhattan & Queens Trac. Grafton County Elec. Co., P. Co., 266 Fed. 625 197,198 U. R- 1916 E> 879 300 Gatlin v. Tarboro, 78 N. C. Graham v. Du Pont, 284 119 425 Fed. 1017 235 Geer v. Connecticut, 161 U. Grant Timber Co. v. Gray, S.519 601 236 U.S. 133 171 General Oil Co. v. Crain, 209 Great Western Mm Co. v. U S 211 509 Harris, 198 U. S. 561 88 . General Ry. Signal Co. v. Great Co- ”• Virginia, 246 U. S. 500 179 „ Burnham 162 U S. 339 437 Geneva Furniture Co. v. Green v. Chicago, Burl. & Q. Karpen & Bros., 238 U. S. ^-y., 205 U. S. 530 318 254 273 Green v. Irazier, 253 U. S. George v. Bode, 170 Wis. 411 548 233 _ . p T x u 536 Georgia v. Stanton, 6 Wall. a L^terurban 50 . 481,483,485,609 _ R- R-> TT « 333 Georgia v. Tennessee Copper Gregory, Matter of, 219 U.S. Co, 206 U. S. 230 482, 210 v TT Q 336 592,609,611,616 Gregory v. Van Ee, 160 U. S. Georgia Ry. & Power Co. v. °43 199 College Park, 153 Ga. 329 441 Grignon’s Lessee v. Astor, 2 Georgia Ry. & Power Co. v. How. 319 336 Decatur, 262 U. S. 432 441, Grisim v. South St. Paul Live 442,709 Stock Exchange, 152 Minn. Georgia Ry. & Power Co. v. 271 42 Decatur, 152 Ga. 143; 153 Groesbeck v. Detroit United Ga. 329 433,435-437 Ry, 257 U. S. 609 192 Georgia Ry. & Power Co. v. Groesbeck v. Duluth, S. S. & Railroad Comm, 278 Fed. A. Ry, 250 U. S. 607; 3 242 6251 I. C. C. 289 423 xxxiv TABLE OF CASES CITED. Page. Page. Grogan v. San Francisco, 18 Hays v. Port of Seattle, 251 Cal. 590 188 U. S. 233 677 Grogan v. Walker & Sons, Hebe Co. v. Shaw, 248 U. S. 259 U. S. 80 130 297 412 Gulf, Colo. & S. F. Ry. v. Heisler v. Thomas Colliery Ellis, 165 U. S. 150 550 Co., 260 U. S. 245 69,179 Gulf, Colo. & S. F. Ry. v. Henderson Bridge Co. v. Texas, 246 U. S. 58 602 Henderson City, 173 U. S. Guthne Natl. Bank v. Guth- 592 331 rie, 173 U. S. 528 674 Hendrick v. Maryland, 235 Guy v. Baltimore, 100 U. S. u. S. 610 180 .434 516,596 Hertz v. Lion Bonding Co., & W- 280 Fed. 540 78,79,84,89 Ry., 208 U. S. 598 536 Hibben v. Smith, 191 U. S. Halo v. Henkel, 201 U & „ Nahimt> n Halfinger v. Davis, 146 U. S.’ S°n ™ TT q 708 314 354 Hill v. Wallace, 257 U. S. Halsted v. Buster, 119 U. S. 310; 615 TT « 257 341 642 Hill v. Wallace, 259 U. S. 44 Hamilton, The, 207 U. S. 398 123 L 3L 234,257,258 Hamilton v. Kentucky Dis- Hinson v. Lott, 8 Wall. 148 tilleries Co., 251 U. S. 146 131 511,519 Hammer v. Dagenhart, 247 Hodges v. Snyder, 261 U. S. U. S. 251 178,179 600 717 Handley v. Stutz, 137 U. S. Holden v. New York & Erie 366 86 Bank, 72 N. Y. 286 223 Harding v. Illinois, 196 U. S. Hollis v. Kutz, 255 U. S. 452 48 78 97 Houck v. Little River Drain- Harford v. United States, 8 age Dist., 239 U. S. 254 721 Cr. 109 167,169 House v. Mayes, 219 U. S. Harris, Matter of, 221 U. S. 270 42 .274 94 Hovey v. Blanchard, 13 N. H. Harns v. District of Colum- 145 223 bia, 256 U S 650 191 H „ EUiott, 167 v g Hart v. United States, 95 U. jaq om S 316 ' 144 001 Hartford Life Ins. Co. v. Johnson, 258 U. S. 612 347 McCarter, 209 U. S. 349 185 Hartman v. Butterfield Lum- TT , ~ , ber Co., 199 U. S. 335 494 ova Harvey v. Union Traction Cotton Mills, 184 U.8.290 230 Co., 257 U. S. 624 347 gull ti. Burr, 234 U. S 712 736 Hatch v. Dana, 101 U. 8. H™t ”■ New York Cotton 2Q5 86 Exchange, 205 U. S. 322 86 Hatch v. Reardon, 204 U. S. Hunt v- United States, 257 152 180 U.S. 125 74,76 Havens & Co. v. Chicago & Hunter v. Pittsburgh, 207 N. W. Ry., 20 I. C. C. 156 324 U. S. 161 186,188 Hawes v. First Natl Bank, Huyett v. Pennsylvania R. 229 Fed. 51 642 R., 86 N. J. L. 683 501 TABLE OF CASES CITED. xxxv Page. Page. Illinois Cent. R. R. v. Inter- Kansas v. Colorado, 185 U. S. state Com. Comm., 206 U. 125 592,609 S. 441 422 Kansas v. Colorado, 206 U. S. Illinois Cent. R. R. v. Mui- 46 592,609,615 berry Hill Coal Co., 238 Kansas v. United States, 204 U. S. 275 323 U. S. 331 592,610 Illinois Northern Utilities Kansas City So. Ry. v. Co., P. U. R. 1920 D, 979 297 United States, 231 U. S. Increased Rates, 1920, 58 I. 423 422 C. C. 220 320 Kaukauna Water Power Co. Inglee v. Coolidge, 2 Wheat. v. Green Bay & Miss. 363 642 Canal Co., 142 U. S. 254 675 Insurance Co. v. Dutcher, Kelly, In re, 26 Fed. 852 429 95 U. S. 269 494 Kelly v. Griffin, 241 U. S. 6 431 International Harvester Co. Kelly Axe Mfg Co v. United v. Kentucky, 234 U. S. 579 316^ Fuel Gas Co., 87 W. Va. T x x. i „ 317 368 612 International Mercantile Ma- Kenney v. Supreme Lodge, rme Co. v. Stuart, 285 Fed 252 g 4n 317 T x ~ Kentucky v. Dennison, 24 Interstate Com. Comm. v. p 401 Alabama Midland Ry., 168 Kentucky Finance Corp. v. t Paramount Auto Exchange, interstate Com Comm v m Wis 586 546 Kepner v. United States, 195 t r + + n 6 U. S. 100 429 Interstate Com. Comm. v. , 000 Chicago Great Western KeTrT § v‘ Couden’ 223 97n Ry., 209 U. S. 108 289 TT a 1 Interstate Com. Comm. v. lHdd V‘ P??rson’ ^8 U. S. 1 178 Goodrich Transit Co., 224 K1™ £ Constr. Co., U.S. 194 422 88 Interstate Consol. St. Ry. v. Unott v. Botany Mills, 179 Massachusetts, 207 U. S. 79 303 U. S 69 125 Jett Bros. Co. v. Carrollton, Knoxville v Knoxvffie Water 252 U S 1 731 Co., 212 U. S. 1 292, Johnson v. United States, 228 _ _ 296, ^5, ^3^ U. S. 457 94 149 Lacy v. Packing Co., 134 JN. Johnson v. Waters, 111 U. S. C. 567 . 425 640 86 Lagergren v. Pennsylvania Jones v. Portland, 245 U. S. R- R-> 130 Minn. 35 315 217 536 Laing v. Rigney, 160 U. S. Joslin Mfg. Co. v. Clark, 44 531 90 R. I, 31 669 Lake Shore & Mich. So. Ry. Joslin Mfg. Co. v. Providence, v- Ohio, 173 U. S. 285 602 262 U. S. 668 709 Lake Shore & Mich. So. Ry. Josslyn v. Phillips, 27 Fed. v. Smith, 173 U. S. 684 324 481 642 Lamar v. United States, 240 Kahn v. Anderson, 255 U. S. 1 57 U. S. 60 . 273 Kane v. New Jersey, 242 U. S. Landon v. Court Industrial 160 316,553 Relations, 269 Fed. 433 635 Kaneko v. Atchison, T. & S. Lane v. Hoglund, 244 U. S. F. Ry., 164 Fed. 263 504 174 208 xxxvi TABLE OF CASES CITED. Page. Page. Laramie County Commrs. v. Love v. Atchison, T. & S. F. Albany County Commrs., Ry., 185 Fed. 321 49,51 92 U. S. 307 190 Low v. Austin, 13 Wall. 29 510 Larsen v. San Francisco, 182 Luckenbach v. McCahan Cal. 1 718 Sugar Refg. Co., 248 U. S. Lawton v. Stede, 152 U. S. 139 645 133 400 Luskey v. United States, 56 Lee v. Munro, 7 Cr. 366 144 Ct. Cl ms 411 62 Leisy v. Hardin, 135 U. S. Luther v. Borden, 7 How. 1 484 100 513,514 Lyng v. Michigan, 135 U. S. Leloup v. Port of Mobile, 127 161 513 U. S. 640 515 McAlester-Edwards Co. v. Lemke v. Farmers Grain Co., Fall 51 App. D. C. 171* 258 U. S. 50 597 277 Fed. 573 ' ’ 201 Lennon, In re, 166 U. S. McCall v. California, 136 548 335,336 u. S.104 315,515 Lincoln Gas Co. v. Lincoln, McCarter v. Hudson County 250 U. S. 256 693 Water Co., 70 N. J. Eq. 695 185 Lindsey v. Allen, 258 U. S. McCaskill Co. v. United XT , u • 47 States, 216 U. S. 504 225 Lindstey v. Natural Carbonic McChord v. Louis. & Nash. Gas Co., 220 U. S. 61 661 R R 183 v g 483 6W McCulloch v. Maryland, 4 United States, 236 U. 8. Wheat. 316 370,601 T • j. tt + McGovern v. Phila. & Read. V- «10 Ry- 235 U. S. 389 504 T- n j- n re . McIntire t>. Wood, 7 Cr. 504 162 SoF # X McIver v. Wattte, 9 Wheat. 280 Jed. 532; 281 Jed. 1021 78,79,84 ^7. , TT .. , G+ . „ 042 Lipke v. Lederer, 259 U. S. Umted StateS’ 1 «1 557 234,257,258 25,? T n ™ 351 Lochner v. New York, 198 MacdonneU, In re, 11 Blatchf U.S. 45 399 1™. „ S431 Lord v. Steamship Co., 102 2°‘ V’ ^a^e’ Kifl TT S 541 129 s-676 516 Los Ángeles County v. Mail Divisor Cases, 251 U. S. Rindge Co., 53 Cal. App. á , 71 166 701 705 Manchester v. Massachusetts, Louisiana v. Mississippi, 202 139 U. S. 240 122 U s. 1 122 Manhattan Life Ins. Co. v. Louisiana v. Texas, 176 U. S. Cohen, 234 U. S. 123 730 1 484,592,604,609 Mansfield, C. & L. M. Ry. v. Louisiana & P. B. Ry. v. Swan, 111 U. S. 379 230,642 United States, 257 U. S. Manufacturers’ Light Co. v. 114 324 Ott, 215 Fed. 940 612 Louisville v. Cumberland Tel. Manufacturers Ry. v. United Co., 225 U. S. 430 296,446 States, 246 U. S. 457 322 Louis. & Nash. R. R. v. Gar- Marble Co. v. Ripley, 10 rett, 231 U. S. 299 50 Wall. 339 623 Louis. & Nash. R. R. v. Mel- Marbury v. Madison, 1 Cr. ton, 218 U. S. 36 717 137 610 Louis. & Nash. R. R. v. Rice, Marin Municipal Water Dis-247 U. S. 201 273 trict, P. U. R. 1915 C, 433 299 TABLE OF CASES CITED. xxxvn Page. Page. Mason v. Missouri, 179 U. S. Milwaukee Elec. Ry. v. Wis- 328 190,196 consin R. R. Comm., 238 Massachusetts, In re, 197 U. U. S. 174 438 S. 482 162 Minneapolis v. Rand, 285 Massachusetts v. Mellon, 262 Fed. 818 694 U. S. 447 .609 Minneapolis & St. Louis R. Mattingly v. North Western R. v. Bombolis, 241 U. S. Virginia R. R., 158 U. S. 211 232 53 642 Minnesota v. Barber, 136 Maxwell v. Bugbee, 250 U. S. U. S. 313 399,514,597 525 317 Minnesota v. Northern Secu- May v. New Orleans, 178 rities Co., 184 U. S. 199 617 U. S. 496 510 Minnesota Rate Cases, 230 Mayfield, In re, 141 U. S. u. S. 352 287, 107 336 ' ' 290,294,602,630,690,691 Meccano, Ltd. v. John Wana- Mississippi v. Johnson, 4 maker, 253 U. S. 136 51 Wall. 475 484 Merchants Elevator Co. v. Missouri v. Angle, 236 Fed. Ches. & Ohio Ry., 147 644 642 Minn. 188 315 Missouri v. Holland, 252 Meriwether v. Garrett, 102 py g 4jq 4g2 601 „U.S. 472 188 Missouri v. Illinois, 180 U. S. Merriam Co. v. Syndicate 208 485 592 609 a ?32 Missouri v. Illinois, 200 U. S. Metcalf v. Barker, 187 U. S. 496 592,615 ... ~ 99 Missouri v. Lewis, 101 U. S. Metropolitan Pavmg Co. v. 22 232 354 A™n^"r^°r R' R’’ onj Missouri ex rel. Southwestern C- 197 m 324 Bell Tel. Co. v. Public Metropolitan Trust Co v. serv. Comm ? 262 n g Houston & Tex. Cent. R. 276 444, 625; 629> R., 90 led b83 298 631, 63^ß38> 679,689,691,695 V' Nebraska, 262 U. S. Missouri, Kans. & Tex. Ry. 390 ax x ^Ät4!1’ 534 v- Cade, 233 U. S- 642 331 Meyer v. State, 107 Neb. Missouri, Kans. & Tex. Ry. „P5/ r , ’¿9/ v. Reynolds, 255 U. S. 565 Michigan ex rel. Groesbeck v. ’ 313 317 Ry’’ 257 192 Missouri Pac. R. R. v. Clar-’ Ä stäte Tel. Co., P. C» > 257 U- S- 533, ,„ U. R. 1921 C, 545 300 n ' Middlesex & Boston Rate Mack- Case, P. 8. C. Mass, Oct. 205n a , 661 28 1914 302 Mitchell Furniture Co. v. Sel- Milburn, Ex parte, 9 Pet. 704 430 2^ Constr. Co., 257 Milheim v. Moffat Tunnel U. b. 213 ™ 310 Dist., 72 Colo. 268 711,716 Monongahela Nav. Co. v. Millard v. Roberts, 202 U. S. United States, 148 US 429 • 486 312 344,345 Miller v. Grandy, 13 Mich. Montalet v. Murray, 4 Cr. 540 487 46 642 Milwaukee,-Town of, v. City Monterey v. Jacks, 203 U. S. of Milwaukee, 12 Wis. 93 188 360 188 XXXVIII TABLE OF CASES CITED. Page. Page. Morgan, Ex parte, 114 U. S. New Orleans v. New Orleans 174 335 Water Works Co., 142 U. Morrison, In re, 147 U. S. 14 276 S. 79 188,190 Mossel v. United States, 56 New Orleans Water Works Ct. Cims. 502 65 Co. v. New Orleans, 164 Mt. Hope Cemetery v. Bos- U. S. 471 616 ton, 158 Mass. 509 188 Newton v. Consolidated Gas Mt. Pleasant v. Beckwith, Co., 258 U. S. 165 287 100 U. S. 514 187 New York v. Louisiana, 108 Mt. Vernon-Woodberry Co. U. S. 76 481 v. Alabama Power Co., 240 New York v. New Jersey, 256 U. S. 30 719 u. S. 296 592,609,615 Mountain Timber Co. v. New York v. Sage, 239 U. S. Washington, 243 U. S. 219 502 57 345 Mulhall v. Fallon, 176 Mass. New York ex rei. Central A?? » K du non Union Trust Co. v. Wen- Mullers Case, 5 Phila 289 429 deU 197 A Div 131 96 99 Munn v. lUinois 94 U S New York Cent. R. R. v. T i1’??9/ 540 sNew York, 186 U. S. 269 731 ^01? n ci S ^°^man G0’» New York Central R. R. v. 211 U. b. 562 90 White, 243 U. S. 188 502 Murray v. Schooner Charm- New York & Chicag0 Grain mg Betsy, 2 Cr. 64 132 Exchange v. Chicago MoSr?Î a%^mted States’ Ain Board of Trade, 127 Ill. 219 U. S. 346 610 ^3 ’ O- New York Life Ins. Co. v. ™ n « Dodge, 246 U. S. 357 399 Nolle v. Oyster, 230 U. S. New York, N H & H R R lùo ÓÓO v United s 251 v g Napa Valley Co. v. Railroad Comm., 251 U. S. 366 500 x_ „ . „ _ National Bank v. Matthews, New York N H. & H. R- R- 98 U. S. 621 - 648 Umted States’ 258 U' S- National Waterworks Co. v. at -v i at tt «> tt r> t» Kansas City, 62 Fed. 853 311 New York, N .H & HR R. Nebraska District, Evangeli- nn7^nded 269 Fed. cal Synod, v. McKelvie, 187 9U\r , 425 N. W. 927 401 404 411 New York & Porto Rico S. S. Nelson v. Ohio Cultivator P°-> In re, 165 U. S. 523 276 Cn 1RS Fod 690 404 Nicholas v. United States, Nelson Co. v. United States, 257 U. S. 71 728 261 U S 17 494 Nirdlmger v. Stevens, 262 Nesmith’ v. Ohio, 257 U. S. Fed- 591 268 622 347 Nishimura Ekiu v. United Newburyport Water Co. v. States, 142 U. S. 651 125 Newburyport, 193 U. S. Noble State Bank v. Haskell, 561 274 219 U. S. 104 534,535,661 New England Divisions Case, North Alaska Salmon Co. v. 261 U. S. 184 317 Pillsbury, 174 Cal; 1 500 New Hampshire v. Louisiana, Northampton Gas Petition, 108 U. S. 76 481, 592 P. U. R. 1915 A, 618 300 New Orleans v. Clark, 95 Oakland v. Pacific. Coast U. S. 644 190 Lumber Co., 171 Cal. 392 675 TABLE OF CASES CITED. xxxix Page. Page. Oceanic Steam Nav. Co. v. Park Square Automobile Sta-Stranahan, 214 U. S. 320 125 tion, Ex parte, 244 U. S. Ogden v. Saunders, 12 Wheat. 412 335 213 660 Patterson v. Bark Eudora, Ohio Valley Water Co. v. Ben 190 U. S. 169 125 Avon Borough, 253 U. S. Pawhuska v. Pawhuska Oil 287 684,689 Co., 250 U. S. 394 190,192 Ohio R. R. Comm. v. Worth- Payette-Boise Water Assn. v. ington, 225 U. S. 101 199 Cole, 263 Fed. 734 144 Oklahoma v. Atchison, T. & peck & Co. v. Lowe, 247 S. F. Ry., 220 U. S. 277 U. S. 165 69,98,422 „, . „ „ Pennsylvania, Ex parte, 109 Oklahoma v. Kansas Natural U. S 174 276 Gas Co., 221 U. S. 229 555, Pennsylvania v. West Vir- nn l m 602 257 U- S- 620 555 Oklahoma v. Texas, 258 U. S. Pennsylvania Coal Co. v. mi? m TT Q 89 Mahon, 260 U. S. 393 542 Oklahoma v. Texas, 261 U. S. Pennsylvania Fire Ins. Co. v. i i at + in n 090 Gold Issue Alining Co., 243 Oklahoma Natural Gas Co. v. tt Q ow Russell, 261 U. S. 290 44, p u i 47 40 Pennsylvania Hospital v. Oklahoma Operating Co? v! p Philadelphia, 245 U. S. 20 730 Love, 252 U. S. 331 614 Pennsylvania Lumbermens Olcott v. Supervisors, 16 92« v’ Meyer, 197 Wall. 678 719,720 p U-407 n n . 318 Old Colony Trust Co. v. Pennsylvama R R V Pu n- Omaha, 230 U. S. 100 438,494 p tan 9°al 9%’ 237 U^S- 121 323 Old Wayne Life Assn. v. Me- R’R> V'Towers’ Donough, 204 U. S. 8 318 p , U' at v 324 Oliver Iron Mining Co. v. W' Pullon, 197 N. Y. Lord, 262 U. S. 172 601 204 , An „ „ 429 Omaha v. Omaha Water Co., Pe°Ple v- Forbes, 143 N. Y. 218 U.S. 180 311 219 „ , 358,359 O’Neil v. Welch, 245 Fed. People v. Rmdge, 174 Cal. 261 86 z43 703 Oregon v. Hitchcock, 202 People ex rel. v. Stevens, 197 U. S. 60 ‘ 615 N. Y. 1 289 Osborn v. United States People ex rel. Clyde v. Bank, 9 Wheat. 738 370 Wendell, 197 App. Div. Osborne v. Florida, 164 U. S. 913; 232 N. Y. 550 95 650 354 People v. Wilcox, 194 N. Y. Pacific Steam Whaling Co. v. 383 48 United States, 187 U. S. Perlman v. United States, 247 447 255 U. S. 7 93 Pacific Tel. Co. v. Oregon, Peters v. Broward, 222 U. S. 223 U. S. 118 484 483 354 Paducah v. Paducah Ry., 261 Petersburg Gas Co. v. Peters- U. S. 267 439 burg, 132 Va. 82 635 Palermo Water Co. v. Rail- Pettengill v. Yonkers, 116 N. road Comm., 227 Fed. 708 49 Y. 558 191 Palmer v. Texas, 212 U. S. Phila. & Read. Ry. v. McKib- 118 89,642 bin, 243 U. S. 264 318 XL TABLE OF CASES CITED. Page. Page. Phila. & Southern S. S. Co. Pullman Co. v. Richardson, v. Pennsylvania, 122 U. S. 261 U. S. 330 422 326 515 Purity Extract & Tonic Co. Pickens v. Roy, 187 U. S. 177 90 v. Lynch, 226 U. S. 192 412 Piedmont Power Co. v. Gra- Pusey & Jones Co. v. Hansham, 253 U. S. 193 347, sen, 261 U. S. 491 77,85 730,731 Railroad Co. v. Husen, 95 Pierce v. Indseth, 106 U. S. U. S. 465 514 546 660 Railroad Commission Cases, Pine Grove v. Talcott, 19 116 U. S. 307 299,309 Wall. 666 719,720 Railroad Comm. v. Chicago, Pme River Logging Co. v. Burl. & Q. R. R„ 257 U. S. United States, 186 U. S. 553 317,321 279 u x t> j Railroad Comm. v. Texas & Pittsburgh, etc, Ry v Board Pacific Ry>> 229 U. S. 336 70 of Public Works, 172 U. S. Ramsay Co. v. Associated o o xl 1 öö Bill Posters, 260 U. S. 501 389 Pittsburg & Southern Coal Randall Gas v Star Glass Co v. Bates, 156 U S Co, 78 W. Va. 252 615 Plymouth Coal Co. v. Penn-’ ScrUggs’ 190 f49 sylvania, 232 U.S. 531 180,331 Works „ 642 Pohl State, 102 Oh. St Raton, 249 U. S. 552 230 vv T 398, 404,410 Reagan v Farmers’ L. & T. Police Jury v Shreveport, 5 Go , 154 p g. 362 309,333 Pollock v.‘Farmers’ L. & T. Reanck v. Pennsylvania, 203 Po^Fe^ Corp. „.Wardell, XUllZil ¿7. J? vöDvllVlvll. U • 0. TT O ooz? 254 151 431 257 Pope v. Louisville Ry, 173’ v- Garbett, 2 C. & K U. S. 573 199 474 358,359 Porphyry Paving Co. v. v' Rundle, 103 U. S. Ancker, 104 Cal. 340 145 222 ., ' _ _ 86 Potomac Elec. Power Co. v. Missouri, Kans. Public Utilities Comm, 276 Ry-» 224 Mass. 379; Fed. 327 635 228 Mass.584 • 318 Prentis v. Atlantic Coast Line Reynolds v. Stockton, 140 Co, 211 U. S. 210 48,616 U. S. 254 351 Prestonettes, Inc. v. Coty, Rice v. Rindge, 53 N. H. 530 707 260 U. S. 720 160 Richmond v. Smith, 15 Wall. Prince v. Crocker, 166 Mass. .429 438 347 718 Riddle, Ex parte, 255 U. S. Public Service Comm. v. Pa- 450 333,334 cific Tel. Co, P. U. R. 1916 Riddle v. United States, 279 D, 947 300 Jed- 216 335 Public Service Ry. v. Board Rindge Co. v. Los Angeles, Public Utilities Commrs, 262 U. S. 700 717 276 Fed. 979 635 Rio Grande Western Ry. v. Public Utilities Comm, v. Stringham, 239 U. S. 44 436 Landon, 249 U. S. 236 87,597 Rishmiller v. Denver & Rio Pueblo of Laguna v. Cande- Grande R. R, 134 Minn, laria, 257 U. S. 623 347 261 315 TABLE OF CASES CITED. xli Page. Page. Robbins v. Shelby County San Diego Land Co. v. Jas-Taxing Dist, 120 U. S. per, 189 U. S. 439 296, 489 515,596 298,634 Roberts v. Bradfield, 12 App. San Diego Land Co. v. Na- D. C. 453 486 tional City, 174 U. S. 739 Roberts v. United States, 176 290,296,298,634 U. S. 221 208 San Diego Water Co. v. San Robinson v. Balt. & Ohio R. Diego, 118 Cal. 556 298 R., 222 U. S. 506 323 Santa Clara County v. South- Rochester v. Briggs, 50 N. Y. ern Pac. R. R., 118 U. S. 553 675 394 550 Rockefeller v. United States, Santaella & Co. v. Lange Co., 257 U. S. 176 135,137 155 Fed. 719 493 Roe, Ex parte, 234 U. S. 70 Sapulpa v. Oklahoma Natural 274,275 Gas Co., 258 U. S. 608 192 Rogers, In re, 116 Fed. 435 ’642 Sargent v. State Bank of Rogers v. Hennepin County, Indiana, 12 How. 371 336 239 U. S. 621 86 SavaSe v. Jones, 225 U. S. Romeu v. Todd, 206 U. S. _ ^^1 614 358 171 Savage v. United States, 92 Rosenberg Bros. & Co. v. a 882 _ „ 494 Curtis Brown Co, 260 bctarre^be^ DoUar S’ S-U S 516 318 Co, 245 U. S. 122 123 Ross, In re, 140 U. S. 453 123 Schollenberger v Pennsyl- Rouquette v. Overmann, L. yama, 171 U. S. 1 514 R. 10 Q. B. 525 660 Schorer, Ex parte, 195 Fed. Rouse v. Hornsby, 161 U. S. Scott v. Donald, 165 U. S. 58 514 Rouse v. Letcher, 156 U. S. ^olt V‘ Fiazier> 253 U. S. 47 199 . 86 oki tt a Seaboard Air Line Ry. v. 1 Caffey, 251 U. S. United States, 261 U. S. q t oo. it j kok ¿Io 299 340,343 Sage In re 224 Fed. 525 642 gears v Akron, 246 U. S. 242 678 St Joseph Ry. v Public Shaffer Cai?t 252 v g Service Comm, 268 Fed. 37 416,420,426 A • ar M KO ™ 035 Shelton v. Platt, 139 U. S. St. Louis v. Shields, 52 Mo. 591 25$ a, • tt zr tt • \ Sherman v. International Life St Louis Hay Co. v. United Ins> Co, 291 Mo. 139 346 States, 191 U. S. 159 494 Shields v. Coleman, 157 U. S. St. Louis R. R. v. Wabash jß8 90 R- R? 2J"7 U. S. 247 199 Shoemaker v. United States, ot. Louis, 1. Mt. & So. Ry. v. 147 u g. 282 678 708 McKnight, 244 U. S. 368 292 Shulthis v. McDougal, 225 & So-Ry- U. S. 561 198,199,736 McWhirter, 229 U. S. 265 274 Silverthorne Lumber Co. v. St. Louis S. W. Ry. v. Alex- United States, 251 U. S. ander, 227 U. S. 218 313,317 385 156,157 St Louis S. W. Ry. v. Ar- Silz v. Hesterberg, 211 U. S. kansas, 235 U. S. 350 331 31 601 St. Louis S. W. Ry. v. United Sioux Remedy Co. v. Cope, States, 56 Ct. Clms. 64 71 235 U. S. 197 315,550 xlii TABLE OF CASES CITED. Page. Page. Slaughter-House Cases, 16 Stanislaus Comity v. San Wall. 36 399 Joaquin & King’s River Sligh v. Kirkwood, 237 U. S. Co., 192 U. S. 201 298,305 52 601 Stanton v. Baltic Mining Co., Smith v. Wilkins, 164 N. C. 240 U. S. 103 177 135 425 State v. Bartels, 191 la. Smyth v. Ames, 169 U. S. 1060 398,404,409 466 289-292 State v. Bluefield Water 294—299, 301, 304, 305, 307- Works Co., 86 W. Va. 260 612 310, 550, 630, 634, 690, 691 State v. Edwards, 86 Me. Snyder v. Marks, 109 Ü. S. 102 522 189 255 State v. First Natl. Bank, 186 South Carolina v. Georgia, Cal. 746 366,367 93 U. S. 4 615 State v. Jersey City, 94 N. J. Southern Iowa Elec. Co. v. L. 431 185 Chariton, 255 U. S. 539 439 State v. Moore, 113 N. C. Southern Ry. v. Greene, 216 697 425 U. S. 400 417,550,732 State v. Mounts, 36 W. Va. Southern Ry. v. Watts, 260 179 590 U.S. 519 • 416,417,422,424 State v. Newark, 117 Atl. Southwestern Bell Tel. Co. v. 158 193,194 Public Service Comm., 262 State ex rel. v. Parr, 109 U. S. 276 444,625, Minn. 147 179 629,631,634-638, State ex rel. Southwestern 679,689,691,695 Bell Tel. Co. v. Public Southwestern Bell Tel. Co. v. Serv. Comm., 233 S. W. Public Serv. Comm., 233 425 • 277,281 S. W. 425 277,281 State v. Stone, 20 R. I. 269 442 Southwestern Oil Co. v. State v. Trenton, 117 Atl. Texas, 217 U. S. 114 179 158 182,185 Spalding & Bros. v. Edwards, State v. Williams, 158 N. C. 285 Fed. 784 66 610 425 Spaulding v. Andover, 54 N. State Freight Tax, 15 Wall. H. 38 188 232 515 Spencer v. Merchant, 125 State Pub. Util. Comm, ex rel. U. S. 345 721 Springfield v. Springfield Sprigg v. Balt. & Ohio R. R., Gas Co., 291 Ill. 209 289 8 I. C. C. 443 324 State Railroad Tax Cases, 92 Spring Valley Water Works U. S. 575 254 v. Schottler, 110 U. S. 347 535 Steenerson v. Great Northern Springfield v. Springfield Gas Ry., 69 Minn. 353 298,299 Co., 291 Ill. 209 289 Sterrett v. Second Natl. Bank, Springfield v. Springfield Gas 248 U. S. 73 88 Co., P. U. R. 1916 C, 281 299 Stevens v. Arnold, 273 Fed. Stafford v. Wallace, 258 U. S. 1022 267,268 495 1,33-38,41 Stewart v. Michigan, 232 U. Stallings v. Splain, 253 U. S. S. 665 515 339 431 Stoehr v. Wallace, 255 U. S. Standard Fuller’s Earth Co., 239 52,53,56,61 In re, 186 Fed. 578 642 Stoutenburgh v. Hennick, 129 Standard Oil Co. v. Graves U. S. 141 515 249 U. S. 389 506,516, Strader v. Graham, 18 How. 518,520 602 642 TABLE OF CASES CITED. xliii Page. Page. Strathearn S. S. Co. v. Dillon, Tiernan v. Rinker, 102 U. S. 252 U. S. 348 125 123 516 Stratton’s Independence v. Title Guaranty Co. v. Allen, Howbert, 231 U. S. 399 177 240 U. S. 136 86 Strickley v. Highland Boy Tom Tong, Ex parte, 108 IT. Mining Co, 200 U. S. 527 536 S. 556 336 Sun Printing Co. v. New Toop v. Ulysses Land Co, York City, 152 N. Y. 257 717 237 U. S. 580 347,730,731 Supervisors v. United States, Topliff v. Topliff, 122 U. S. 4 Wall. 435 663 121 494 Sutton v. United States, 256 Torres v. Lathrop, Luce & U. S. 575 75,76 Co, 231 U. S. 171 171 Swafford v. Templeton, 185 Towne v. Eisner, 245 U. S. U. S. 487 273 418 135 Sweet v. Rechel, 159 U. S. Travis v. Yale & Towne Mfg. 38° TT . J o 677>678 Co, 252 U. S. 60 420 Swift & Co. v. United States, Treat Mfg. Co. v. Standard 196 U. S. 375 35 steel Co, 157 U. S. 674 232 Swigart v. Baker, 229 U. S. Trenton v. New Jersey, 262 m187 x ATT i 143 U. S. 182 192,193,196,674 Tampa Water Works Co. v. Troy Bank v. Whitehead & Tampa, 199 U. S. 241 438 Co, 222 U. S. 39 86 ^iUmted Troy Union R. R. v. Mealy, 284 led. 371 319,321 254 U. S. 47 97,98 Tennessee Rates & Charges, Truax v. Corrigan, 257 U. S. bo 1. u. C*. 160 321 312 399 Terminal Taxicab Co y Dis- Truax v Raich 239 U. S. tnct of Columbia, 241U. S. 33 399 m n D5’538 Trustees of Schools v. Tat-lexas v. Eastern Texas R. R, 19 th 0*7 100 258U.S.204 290 rp ’ 13 T 188 Texas v. Interstate Com. T™!?8Ncw Jersey’ 211 Comm., 258 U. 8.158 592, T, U, ., „ .. 610,611,617 Underwood Typewriter Co. Texas v. White, 7 Wall. 700 481 «’■ Chamberlain, 254 U. S. Texas Co. v. Brown, 258 U. S. tt • t • m • 41b 466 ko« ciß Kin Union Lime Co. v. Chicago Texas & New Orleans R R ’ & N. W. Ry, 233 U. S. 211 536 v. Sabine Tram Co, 227 ^‘am United U.S. Ill 70 States, 99 U. S. 402 422 Texas ’& Pac. Ry. v. Abilene Union Pac- R- R- v- Weld Cotton Oil Co, 204 U. S. County, 247 U. S. 282 426 426 323 Union & Planters’ Bank v. Texas & Pac. Ry. v. Inter- Memphis, 189 U. S. 71 230 state Com. Comm 162 U. United Fuel Gas Co. v. S. 197 322 Hallanan, 257 U. S. 277 34,597 Texas & Pac. Ry. v. Marshall, United Fuel Gas Co. v. 136 U. S. 393 623 Public Service Comm, 73 Thames & Mersey Ins. Co. v. W. Va. 571 612,615 United States, 237 U. S. 19 70 United Mine Workers v. Thomas v. Iowa, 209 U. S. Coronado Coal Co, 259 258 731 U. S. 344 178 xliv TABLE OF CASES CITED. Page. Page. United States v. Alabama & United States v. New River Vicksburg Ry., 40 I. C. C. Collieries Co., 262 U. S. 405 324 341 340 United States v. American United States v. New River Linseed OH Co., 275 Fed Collieries Co., 276 Fed. 939 371,380 690 340,341,345 United States v. American United States v. North Tobacco Co., 221 U. S. American Transp. Co., 253 106 389 U. S. 330 75 United States v. Andrews & United States v. Oppen- Co, 207 U. S. 229 494 heimer, 242 U. S. 85 430 United States vAtchison,T United States v. Patten, 226 „U S- Q 71 U. 8. 525 39 Umted States v. Bevans, 3 United States v. Pfitsch, 256 Wheat. 336 122 g 547 365 United States v Chandler- United’States v. Phellis, 257 Dunbar Co, 229 U.S 53 340 u. g156 ’ i34> United States v. Chung Shee,’ TT _ J35,137,235,236,256 71 Fed. 277; 76 Fed. 951 430 U^,ted. Stat®s United States v. Clark, 200 Envelope Co, 249 U. S. U S 601 224 225 493 United States v. Cohen United States v: Railroad Co,. Grocery Co, 255 U. S. 81 343 17 Wall. 322 190 United States v. Cooksey, 275 United States v. Rauscher, Fed. 670 216 119 U. S. 407 431 United States v. Denver & United States v. Rindge, 208 Rio Grande R. R, 191 U. S. Fed. 611 703 84 437 United States v. Rodgers, 150 United States v. Detroit Tim- U. S. 249 132 ber Co, 200 U. S. 321 224 United States v. Simpson, 252 United States v. .Diekelman, U. S. 465 122 92 U. S. 520 125 United States v. Sischo, 262 United States ex rei. Me- Fed. 1001; 270 Fed. 958; Alester - Edwards Co. v. 256 U. S. 688; 260 U. S. Fall, 51 App. D. C. 171; 697; 260 U. S. 701 165,166 277 Fed. 573 201 United States v. Smiley, 27 United States v. Ferger, 250 ped. Cas. p. 1132 122 TT XX u 3$ United States v. Stafoff, 260 United States v. Gettysburg TT q a 77 ißö Elec. Ry 160 U. S 66 8 678 „ Trans.Mis_ United States v. Huntington, . v • i . * „ TT 275 Fed. 674 216 ««^Freight Assn., 166 U. United States v. Hvoslef, 237 Union Pac. 837 United States n. Kettenbach, * C- 324 208 Fed. 209 225 United States v Utah, Ne- United States- v. Knox, 128 ir 4 * U S 230 75 U. S- 414 74’76 United'States v. Lanza, 260 United States Glue Co v. U. S. 377 • 126 Oak Creek, 247 U. S. 321 416 United States v. Luskey, 262 United States Trust Co. v. U. S. 62 65 Müler, 262 U. S. 58 61 TABLE OF CASES CITED. xlv Page. Page. Utah Power & Light (Do. v. Ward & Gow v. Krinsky, 259 United States, 243 U. S. U. S. 503 502 389 144 Waring v. The Mayor, 8 Valley Farms Co. v. County Wall. 110 510 of Westchester, 261 U. S. Warren v. Hayes, 74 N. H. 155 354 355 223 Vance v. Vandercook Co., Watkins, Ex parte, 3 Pet. 193 336 No. 1, 170 U. S. 438 514 Watson v. Needham, 161 Vance v. Vandercook Co., Mass. 404 191 No. 2,170 U. S. 468 86 Watts, In re, 190 U. S. 1 642 Van Cleve v. Passaic Valley Webber v. Virginia, 103 Sewerage Commrs., 71 N. U. S. 344 516,596 J. L. 183 187 Weeks v. United States, 232 Van Dyke v. Geary, 244 U. S. U. S. 383 158 3$ 297,536 Weems Steamboat Co. v. Vetaloro v. Perkins, 101 Fed. People’s Steamboat Co., v3?3k vik w 504 214 U.S. 345 541 Vicksburg v. Vicksburg Wa- Welton v. Missouri, 91 U. S. terworks Co, 202 U. S. 453 230 275 516,596 Vighotti v. Pennsylvania, 258 West v. Kansas Natural Gas U. b 403 728 Co 221 u g. 229 555 Vincenti v. Umted States, 272 kq? eqo cqo End H4; 256 U.S. 70° 57 Western & Atlantic ¿T Railroad Comm., 261 States, 262 U. S. 337 344 tt q w ’ Vogelstein & Co. v. United Western Indemnity Co v. States, 56 Ct. Clms. 362 337 Pillsburv 170 Cal 686 ' 500 Von Hoffman v. Quincy, 4 ÖUÖ Wall. 535 660 MeS9W^ V‘ nnn Wabash R. R. v. Adelbert Pillsbury, 172 Cal. 407 500 College, 208 U. S. 38 89 ~ T. °”1’ Wade v. Travis County, 174 °11 £°- v' L1Pscomb, U. S. 499 354 ? 346 T . p , 515 Wagner v. Baltimore, 239 Western Union Tel Co. v. U. S. 207 721 Poster, 247 U. S. 105 597 Wagner v. Covington, 251 Wheeler v. United States, 226 U. S. 95 516,518,519 S-478 156> J^8 Wagner Elec. Mfg. Co. v. White, In re, 45 Fed. 237 430 Lyndon, 256 U. S. 690 229 Whiteside v. United States, Wagner Elec. Mfg. Co. v. 93 U. S^247 144 Lyndon, 282 Fed. 219 227 Whiting v. Commonwealth, Walker v. Sauvinet, 92 U. S. Mass. 468 675 90 232 Wildenhuss Case, 120 U. S. Wallace v. Hines, 253 U. S. 4 125,132 66 426 Willard, Sutherland & Co. v. Walling v. Michigan, 116 U. United States, 262 U. S. S. 446 516 489 495,496,498 Walls v. Midland Carbon Willard, Sutherland & Co. v. Co., 254 U. S. 300 602 United States, 56 Ct. Clms. Ward v. Foulkrod, 264 Fed. 413 489 627 86 Willcox v. Consolidated Gas Ward v. Maryland, 12 Wall. Co., 212 U. S. 19 287, 418 516,596 446,631,632,690,693 XLVi TABLE OF CASES CITED. Page. Page. Williams, In re, 240 Fed. 788 642 Withnell v. Ruecking Constr. Williams v. Eggleston, 170 U. Co, 249 U. S. 63 354 S. 304 190,196,674 Woodruff v. Parham, 8 Wall. Williams v. Parker, 188 U. S. 123 - 506, 491 677 510-512,519,520,522 Wilson v‘ nAA Worcester v. Worcester Con- 832 1 solidated St. Ry, 196 U. S. Wilson v. Pauly, 72 Fed. 129 223 kqq ioo 10g Wilson v. Shaw, 204 U S. 24 486 Work v United gtates -United States, 221 rel Mosier> 261 U. S. 352 209 Winchester v. Jackson, 3 Cr. Worth v. Railroad, 89 N. C. 514 642 291 425 Windsor v. McVeigh, 93 Wright -Blodgett Co. v. U. S. 274 351 United States, 236 U. S. Winehill & Rosenthal v. 397 225 Louisiana, 258 U. S. 605 347 Wyeth v. Cambridge Board Winona v. Botzet, 169 Fed. of Health, 200 Mass. 474 399 321 191 Wyoming v. Colorado, 259 Wisconsin v. Pelican Ins. Co, u. S. 419 592 127 U. S. 265 480 Yick Wo v. Hopkins, 118 Wisconsin & Mich. Ry. v. tt a ocß ogg Powers, 191 U. S. 379 98,99 Vn„'„ J. 9aq tt a Wisconsin, Minn. & Pac. R. Y^' Parte> 209 U- S- ... R. v. Jacobson, 179 U. S. w x . 014 2o7 7ig Yuma County Water Assn. v. Wisconsin R. R. Comm. v. Schlecht, 275 Fed. 885 139,142 Chicago, Burl. & Q. R. R„ Zeckendorf v. Steinfeld, 225 257 U. S. 563 317,321 U. S. 445 437 Wiswall v. Sampson, 14 How. Zucht v. King, 260 U. S. 52 90 174 727 TABLE OF STATUTES. Cited in Opinions. (A) Statutes of the United States. Page. Page. 1789, Sept. 24, c. 20, 1 Stat. ‘ 1912, Aug. 24, c. 389, 37 Stat. 73 (see Judiciary Act). 539, § 8............. 72 1875, Mar. 3, c. 137, 18 Stat. 1913, Mar. 4, c. 143, 37 Stat. 470, § 5.................. 642 797 ............... 70,72 1878, June 3, c. 151, 20 Stat. 1913 Oct. 3, c. 16, 38 Stat. 89 ................... 216,222 166.................. 235 1882, May 6, c. 126, 22 Stat. 1913 Qct. 22, c. 32, 38 Stat. 58, § 6 ........... 259,262 208 ............... 321 1884t5’ c‘ 220’ 23 So^n 1913, Dec. 23, c- 6, 38 Stat. 251....... 647,650,652 1887, Feb. 4, c. 104, 24 Stat. gg rrs 379 (see Interstate Com- g 4 ........648 663 664 merce Acts). gg Ciò......... ’ ’ rr*? 1889, Mar. 2, c. 382, 25 Stat, r 12.................R47 855 (see Interstate ” ’¿50^652, 655,662-665 Commerce Acts). §§ 14, 15............ 663 1890 3 0 .... 209 (Sherman Act) 9, J(m „ „ 9 38 gtat 1509 a a 275.. 165,167,168,170 4’ 375’ 27 St k 91R § 4................ 167,170 1898, July!,' c. 541, 30 Stat. 1915’ 28’ c’ 22’ 38 Sta3 1fi2 544 (see Bankruptcy Act). g 9 .............. ’1fio 19 ?««JTa 17, °'1093, i3?qS^q 149 1915, Mar. 3, * c.’ 83, 38 Stat. 3oo, § 4.......... 13b, 139, 144 Q9k R9 RQ 19794FRbQ2°’ °* 592, 33 S9no 911 1916, June 3, c. 134, 39 Stat. ’ 1906, June 29, c. 3591, 34 215 ,§§ 120, 123 337,340 Stat. 584 (see Inter- 28, c. 261, 39 Stat. state Commerce Acts). _ 4^ .... • • • • • • • • • • • • • ; 8 7 423 1916, Sept. 6, c. 448, 39 Stat. 1908, Apr’. 22,’¿149, 35 Stat. 726..... 151,153,731,734 65 (see Employers’ Liabil- § -••• •............ 731 ityAct). § 3................ ,34 1909, Aug. 5, c. 6, 36 Stat. § 4............. • 153 112..................... 425 1916, Sept. 7, c. 461, 39 Stat. 1911, Mar. 3, c. 23Ì, 36 Stat. 752 ............ 647,652,665 1087 (see Judicial Code). 1916, Sept. 8, c. 463, 39 Stat. 1912, Feb. 19, c. 46, 37 Stat. 756, Tit. I, §§ 1, 2.... 134,135 67............... 200,202, 205 1917, Feb. 5, c. 29, 39 Stat. § 1................... 202,206 874 ...... 258,259,261 § 2.............. 203,206 § 3 ............ 259-261 51826°—23---IV XL VII xlviii TABLE OF STATUTES CITED. Page. Page. 1917, June 21, c. 32, 40 Stat. 1922, Sept. 21, c. 356, 42 232 ...................... 647, Stat. 858........... 103, 651,652,655,665 130,167 § 4............. 647,651,652,655 Tit. IV, §§ 401 (c), 431, 1917, Aug. 10, c. 53, 40 Stat. 534 167 276, § 10.... 341,342,361,364 ’' ’ § ;..; ’ ¡¿3 130 19^ 63’ 40 Stat' A7 1922’ 21’ c- 369> 42 ; 32°> § (f) y • • — y; v 67 Stat. 998............... 1,3,31 1917, Oct. 6, c. 106, 40 Stat. 8 9 ini 2 mH1«”?.................... 52,t“ §§ 2 4 §§ 5, 6, 7................... 53 r 4................ 3 5 42 § 9.................... 57,60,61 2 ¿2 1918, Feb. 8, c. 12, 40 Stat. so (b)..............¿74? 433............ 200,201,204,205 g ¡A............. ’ dao § 4 ......... 200,201,204,207 -OOQ 8,/ ‘ \ g 7 901 902 1923, Mar. 4, c. 276, 42 Stat. 1918, Nov.’ 4’ c. 201, 40 Stat.’ 1054.................: • 235,258 1020 52 Constitution. See Index at 1919, Feb.’24,’ c. 18, 40 Stat. end of volume. 1085, § 252 ............. 234,256 Ordinance of 1787........ 400 1919, July 11, c. 6, 41 Stat. Revised Statutes. 35 59 § 737................. 351 1919, July 11, c. 10, 41 Stat. r 1010.......... 227,233 157........................ 282 § 1012 227 233 1919, Oct. 28, c. 85, 41 Stat. r 2766. 165’ 168 305 (Prohibition Act).... 102, r 2775............ 103’ 130 103,119,126,132 | 2806............ 165 T1t. H, § 1............ 126 § 2807.............. 165 § 3............ J26 r 2809...... 165,166,168 | «........ I 3116.............. 167 § 23 .......... 127 § 3224.......... 234,254 „ TTT § 26........... 127 § 3226.......... 235,258 Tit. Ill, § 20.......• • 128 § 3228.............. 256 1920, Feb. 28, c. 91, 41 r 4197 ^67 Stat. 456 (Transportation § 4394.................• 212 Act)...................... 275, r 4911.........’..’’’’ 213 314,414,423 | 4914 214 § 206 (a), (b)...............314 § 4915........... 209,211 1920, June 5, c. 241, 41 Stat. r 5136.......... 366,368 a ’' n/ ” '¿a ’ jA’ai T Bankruptcy Act.................. 356,358 1921, Aug. 24, c. 86, 42 Stat. s J? 187 & ’ 1 31 257 S 21 (a)............ 356 1921, Nov.' 23, c. 134, ’ 42’ Employers’ Liability Act... 503 Stat 222 ’ ’ 102 127 Interstate Commerce Acts. .318, § 3."...127 320,423,697 1921, Nov. 23, c. 135, 42 Stat. § 2.....................322 224 ................... 447,479 § 3................... 322 1921, Nov. 23, c. 136, 42 Stat. § 20 .......... 423,696,697 268, § 252......... 234,235,256 § 22.......... 318,320,423 1922, May 26, c. 202, 42 Stat. Judicial Code.............. 153 596, § 3............... 167,170 § 56 ............ 78,83,87 1922, Sept. 14, c. 305, 42 § 128.......... 162,197,198 Stat. 837 ............. 226,230 § 237......... 314,546,731 TABLE OF STATUTES CITED. xlix Page. Page. Judicial Code—Continued. Judicial Code—Continued. § 238 ............... 3,121,135, § 262.......... 159,162 176,210,226,230,358, § 265 .......... 89,226,230 364,416,428,507,629 § 266........... 44,45,47,629 § 240................... 159,162 Judiciary Act, 1789 ........ 484 § 241...................... 217 (B) Statutes of the States and Territories. Alabama. Page. Nebraska. Page. 1920, Gen. & Loc. Acts, 1919, Laws, c. 190, Tit. 5, No. 35 ....................... 658 Art. HI............. 80 California. §4(1), (2). 80 Const....................... 705 §4(3).......... 81 1913, Laws, p. 549 ......... 702 1919, Laws, c. 249.. 397,411 1917, Laws, c. 586.......... 500 §§ 1-4.........397 1919, Laws, c. 471.......... 500 1921 Laws/c. 61, §§ 1, Bank Act, § 15.............. 367 2 3 7 411 Code Civ. Proc, § 1241.. 702 Coip.’ gtat^ I J™ §§ 7745-7748.78,80 - § 1273.. 366 § 8546............. 728 Colorado. New Jersey. ........................... 716 Const.................. 187 1922, Laws, Ex. Sess c 1804, Act Feb 29.... ^4 iri • j A P‘ .......... 1 1852, Act Mar. 24........ 184 t qkqo RKQ 1855, Act Mar. 2.................................. 184 1921, Laws, c. 8532 .. 658 1859 Act Mar x _ 184 .00 1870, Laws, p. 20........ 267 1907, Acte, p.' 73’.'. ’. ’.'. *. 439 1907’ Laws’ c* 25?™ ‘ i¿A 1920, Acts, p. 107.......... 658 s 2 ’ iyj’ }y? Civ. Code 1910, § 2662.. 439 4 c 266, Iowa. H 1 9A7’ 1919, Laws, c. 198, §§ M v v 1 2 409 New York. Kansas. Const, Art. I....... 198 1920, Laws, Spec. Sess, 1907, Laws, c. 429 (Pub- c. 29............... 523,524,533 11C Serv. Comm. Law). 44, §§ 6, 7..................... 540 48 Louisiana. § 22........... 48 1920, Acts, No. 23.... 658 19H, Laws, c. 802.... 95,99 Minnesota. §§ 331, 336. 99 Const, Art. 9, § 1.. 173,176 1919, Laws, c. 627 . 96 1913, Laws, c. 218.......... 313 1920, Laws, c. 925, §§ 1921, . Laws, c. 223.. 172,174 1304, 1305 .. 44,48 §§12 174 Tax Law, Art. XI, § 251. 95, §§ 3,’ 6...'. 175 97 Gen. Stats. 1913, § 7735. 313 Art. XV...... 95 Mississippi. Income Tax Law.......... 420 1920, Laws, c. 183.... 658 North Carolina. Missouri. Const.................... 414 Const....................... 228 Art. V, § 3.........415 l TABLE OF STATUTES CITED. Page. Page. North Carolina—Continued. Utah. 1921, Laws, c. 20... 649,651 Const......................325 § 1......... 652 Art. XIII, §§ 2, 3, § 2......... 651 4.................. 328 § 4......... 652 1919, Laws, c. 114.. 325,328 1921, Laws, c. 34... 413,415 § 5864 .... 328 Sched.D,§§ 101-904. 415 West Virginia. § 101..... 425 Const.................... 590 §202...... 415 1913, Acts, ft. 9.... 605,612 §306 ..... 424 §3............ 605 1921, Laws, c. 35.......415 §11........ 612 Ohio. §16........... 615 1919, June 5 (108 Oh. ' § 18........612 Laws 614)..................410 1915, Acts, c. 8.. 605,612 Gen. Code, § 7648 ......... 410 § 3.........605 § 7729 ...... 410 §§ 23, 24 ... 612 § 7762-1 .... 410 1919, Acts, c. 71....... 553, § 7762-2 .... 410 555,581,582,605, § 7762-3 .... 410 607,612,623, 624 Porto Rico. §§ 1,2.. 582,593 Mortgage Law, Art. 42.. 171 §3.... 583,605 Mortgage Law Regula- §§4, 5.. 584,593 tions, Arts. 91,175.... 171 §6.... 585,594 Rhode Island. § 7........... 585 1915, Laws, c. 1278. 668,670 § 8.... 585,618 §§ 3-6...................... 670 §9......... 585 §§ 11, 12, 14-18, 21. 671 1921, Acts, c. 150... 605,612 § 23................... 672,677 §3......... 605 §§ 25, 26........ 672 Code, c. 15-0, § 16...683 Gen. Laws, c. 298, § 1.. 673 Wisconsin. South Dakota. Stats. 1917, § 4096 (3) .. 548 1921, Laws, c. 31...... 658 § 4096 (6) .. 548 Tennessee. § 4096 (7) .. 547 1921, Acts, c. 37 ..... 658 §4097 (2) .. 547 T?cxas 1907, Acts, p. 479.... 507 Rev. Civ. Stats.: Arts. 1006-1017.... 352 Art. 7377 ................. 507 (C) Treaties. Great Britain. Extradition Treaty. 426,429 I CASES ADJUDGED IN THE SUPREME COURT OF THE UNITED STATES AT OCTOBER TERM, 1922. BOARD OF TRADE OF THE CITY OF CHICAGO ET AL. v. OLSEN, UNITED STATES ATTORNEY FOR THE NORTHERN DISTRICT OF ILLINOIS, ET AL. APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS. No. 701. Argued February 26, 1923.—Decided April 16, 1923. 1. The decision of this Court in Hill v. Wallace, 259 U. S. 44, holding that local dealings on boards of trade in grain for future delivery, could not constitutionally be brought under federal control by means of the taxing power, as was attempted by the Future Trading Act, is not an authority against the Grain Futures Act of September 21, 1922, c. 369, 42 Stat. 998, which is an exercise of the power to regulate interstate commerce. P. 31. 2. The flow of grain shipped into the Chicago market from other States, stored temporarily or held on cars, sold on the Chicago Board of Trade, and reshipped in large part to other States and foreign countries, is interstate commerce subject to regulation by Corigress. P. 33. 3. The fact that such grain is shipped under through bills of lading from western to eastern States giving shippers the right to remove the grain at Chicago for temporary purposes of storing, inspecting, weighing, grading, or mixing, and of changing ownership, consignee or destination, and then of continuing the shipment under the same contract at the same rate, while it does not prevent the local taxing of the grain while in Chicago, does not take it out of interstate commerce so as to deprive Congress of the power of regulation over it. P. 33. Stafford v. Wallace, 258 U. S. 495. 51826°—23-------1 2 OCTOBER TERM, 1922. Syllabus. 262 U. S. 4. Neither does the fact that grain so shipped is temporarily stored in Chicago in warehouses and mixed with other grain, so that the owner receives other grain when presenting his receipt for continuing the shipment. P. 33. Eureka Pipe Line Co. v. HaUanan, 257 U. S. 265. 5. Sales on the exchange of the Chicago Board of Trade are indispensable to the continuity of this flow of grain in interstate commerce. P. 36. 6. Congress having reasonably found that sales of grain for future delivery (most of which transactions do not result in actual delivery but are settled by off-setting with like contracts), are susceptible to speculation, manipulation and control, affecting cash prices and consignments of grain in such wise as to cause a direct burden on and interference with interstate commerce therein, rendering regulation imperative for the protection of such commerce and the national public interest therein,—had power to provide in the Grain Futures Act, supra, for placing grain boards of trade under federal supervision and regulation as “ contract markets,” as a condition to dealing by their members in contracts for future delivery. P. 36. 7. The provision of the act requiring each board, so designated, to adopt a rule permitting the admission, as members, of authorized representatives of cooperative associations of producers engaged in the cash grain business, who comply, and agree to comply, with the rules of the board applicable to other members, and forbidding any rule to prevent the return of the commissions earned by such a representative, less expenses, for division among the members of his association on a pro rata patronage basis,—does not take the property of the members of the Chicago Board of Trade without due process of law. P. 40. 8. The Chicago Board of Trade is engaged in a business affected by a public national interest, and subject to national regulation as such. P. 40. 9. And Congress, therefore, may reasonably limit the rules governing its conduct to prevent abuses and secure freedom from undue discrimination in its operations, even if, incidentally, the value of memberships is decreased. P. 41. 10. The constitutionality of provisions of the above act forbidding use of the mails or interstate means of communication, to offer or accept sales for future delivery, except through members of boards of trade, is not here involved, since the plaintiffs are not affected by them, and, under § 10, invalidity of part of the act is not to affect the validity of the remainder. P. 42. CHICAGO BOARD OF TRADE v. OLSEN. 3 1 Statement of the Case. 11. Section 9 of the act, declaring it to be a misdemeanor for a member of a board of trade, designated as a “ contract market,” to fail to evidence any contract mentioned in § 4 by a written record as therein required, is constitutional. P. 42. 12. The constitutionality of the part of § 9 providing punishment for delivering through the mails, or interstate means of communication, false or misleading crop or market reports, is not involved in this case. P. 42. 13. Neither is the constitutionality of paragraph (b) of § 6, giving the commission power to exclude from “ contract markets ” persons violating the act or attempting to manipulate the price of grain, in violation of § 5, or of any rule or regulation made in pursuance of its requirements. P. 43. Affirmed. This is an appeal from a decree of the District Court for Northern Illinois, dismissing a bill in equity. The appeal is under § 238 of the Judicial Code (as amended Act January 28, 1915, c. 22, 38 Stat. 803, 804), the case being one in which the constitutionality of the Grain Futures Act (enacted by Congress September 21, 1922, c. 369, 42 Stat. 998), is drawn in question. The bill was brought by the Board of Trade of the City of Chicago, and a number of its members representing each class of traders on the exchange of the Board, to enjoin the United States District Attorney at Chicago, the Secretary of Agriculture, and the United States Postmaster at Chicago from taking steps to enforce the provisions of the act against them on the ground that it violates their rights under the Federal Constitution. The purpose of the act is expressed in its title to be for the prevention of obstructions and burdens upon interstate commerce in grain by regulating transactions on grain future exchanges and for other purposes. Its second section, par. (a), is one of definitions. Its definition of interstate commerce, in the sense of the act, is as follows: “The words ‘interstate commerce’ shall be construed to mean commerce between any State, Terri 4 OCTOBER TERM, 1922. Statement of the Case. 262 U. S. tory, or possession, or the District of Columbia, and any place outside thereof; or between points within the same State, Territory, or possession, or the District of Columbia, but through any place outside thereof, or within any Territory or possession, or the District of Columbia.” Paragraph (b) contains the following addition to the foregoing definition: “(b) For the purposes of this Act (but not in any wise limiting the foregoing definition of interstate commerce) a transaction in respect to any article shall be considered to be in interstate commerce if such article is part of that current of commerce usual in the grain trade whereby grain and grain products and by-products thereof are sent from one State with the expectation that they will end their transit, after purchase, in another, including, in addition to cases within the above general description, all cases where purchase or sale is either for shipment to another State, or for manufacture within the State and the shipment outside the State of the products resulting from such manufacture. Articles normally in such current of commerce shall not be considered out of such commerce through resort being had to any means or device intended to remove transactions in respect thereto from the provisions of this Act. For the purpose of this paragraph the word ‘ State ’ includes Territory, the District of Columbia, possession of the United States, and foreign nation.” Section 3 is in the nature of a recital and finding as follows: “ Sec. 3. Transactions in grain involving the sale thereof for future delivery as commonly conducted on boards of trade and known as 1 futures ’ are affected with a national public interest; that such transactions are carried on in large volume by the public generally and by persons engaged in the business of buying and selling grain and the products and by-products thereof in inter- CHICAGO BOARD OF TRADE v. OLSEN. 5 1 Statement of the Case. state commerce ; that the prices involved in such transactions are generally quoted and disseminated throughout the United States and in foreign countries as a basis for determining the prices to the producer and the consumer of grain and the products and by-products thereof and to facilitate the movements thereof in interstate commerce; that such transactions are utilized by shippers, dealers, millers, and others engaged in handling grain and the products and by-products thereof in interstate commerce as a means of hedging themselves against possible loss through fluctuations in price; that the transactions and prices of grain on such boards of trade are susceptible to speculation, manipulation, and control, and sudden or unreasonable fluctuations in the prices thereof frequently occur as a result of such speculation, manipulation, or control, which are detrimental to the producer or the consumer and the persons handling grain and products and by-products thereof in interstate commerce, and that such fluctuations in prices are an obstruction to and a burden upon interstate commerce in grain and the products and by-products thereof and render regulation imperative for the protection of such commerce and the national public interest therein.” The act in §4 forbids all persons to use mails or interstate telephone, telegraphic, wireless or other communication, in offering or accepting sales of grain for future delivery or to disseminate prices or quotations thereof, excepting the man who holds the grain he is offering for sale, and the owner or renter of land on which the grain offered for sale is to be grown; and excepting also members of boards of trade located at a terminal market on which cash sales occur in sufficient volume and under such conditions as to reflect the general value of grain and its different grades, and which have been designated by the Secretary of Agriculture as “ contract markets.” The act puts these boards of trade under the supervision of the Secretary of Agriculture and imposes conditions 6 OCTOBER TERM, 1922. Statement of the Case. 262 U. S. precedent and subsequent on his power to designate or continue them as “ contract markets.” The conditions are: (a) The keeping of a record with prescribed details of every transaction of cash and future sales of grain of the Board or its member in permanent form for three years, open to inspection of representatives of the Departments of Agriculture and of Justice. (b) The prevention of the dissemination by the Board or any member of misleading prices. (c) The prevention of manipulation of prices or the cornering of grain by the dealers or operators on the Board. (d) The adoption of a rule permitting the admission as members of authorized representatives of lawfully formed cooperative associations of producers having adequate responsibility engaged in the cash grain business, complying with and agreeing to comply with, the rules of the Board applicable to other members, provided that no rule shall prevent the return to its members on a pro rata patronage basis the money collected by such association in the business, less expenses. The Secretary of Agriculture, the Secretary of Commerce and the Attorney General are made a commission to hear and determine, after due notice, whether any board of trade has failed or is failing by rule to do the things required above, and, if found in default, to suspend its functions as a contract market for a period not to exceed six months, or to revoke its designation as such, with an appeal on the record to the Circuit Court of Appeals within the circuit where the board is situate. Such Commission, too, is to hear appeals from the Secretary’s action in refusing to designate any board of trade as a contract market. There is a further provision for excluding from all contract markets and trading privileges any person violating CHICAGO BOARD OF TRADE v. OLSEN. 7 1 Statement of the Case. the provisions of the act or the regulations in pursuance thereof. Section 9 declares anyone trading in futures in violation of § 4 or sending intentionally or carelessly, false or misleading quotations or information as to the prices of grain, guilty of a misdemeanor. The bill of the plaintiffs describes the organization of the Chicago Board of Trade as a corporation under a special act of the Legislature of Illinois, passed in 1859, with a membership of 1600 and a board of eighteen directors, of whom one is president. It avers that the Board does no business in selling or buying grain, but only furnishes an exchange and offices where such business can be done by its members; that it does not deliver any market quotation through interstate means, but it does cause to be collected the first price and each change of price on its exchange in cash and future sales during the regular hours in the exchange hall and delivers them to certain telegraph companies, who pay the Board for this information. The bill further avers that it is sustained only by the initiation fees and dues of its members, the former being $25,000, for each member, and the latter being in the form of annual assessments, that it has from these sources accumulated funds with which to provide a large building and offices for the exchange, from some of which it receives rental and so has property worth two millions of dollars or more; that its existence depends on keeping its memberships valuable; that it does this by requiring character and financial responsibility as qualifications for its membership and by a requirement that a member shall charge for every sale a fixed minimum commission to a non-member principal, and a less minimum to a member who shall be his principal; that corporations are not permitted to be members, but that when two of the stockholders and officers are members, the corporation 8 OCTOBER TERM, 1922. Statement of the Case. 262 U. S. is permitted as a member to make contracts on the exchange. The bill further avers that if the Board were required to admit representatives of cooperative associations of producers with the privilege of dividing with their members the proceeds of commissions less expenses, it would greatly impair the value of its memberships to other members. The bill further avers that the members of its exchange engage only in three kinds of trading. (1) Many act as commission merchants and receive from producers and country grain dealers grain in cars and boats consigned to them which as agents they sell for immediate delivery and account to their principals for the proceeds of such sales less their commissions and other expenses, and many members as principals or agents purchase and sell grain in Chicago which is in cars or elevators for immediate delivery, and all of these transactions are known as “ cash trades.” (2) Many members send out in the afternoons whenever market conditions are favorable, telegrams or letters to country grain dealers offering to buy grain, or to millers and other non-residents of Chicago, probable buyers, offering to sell grain at released prices and to be shipped within a certain time on condition that these offers be accepted before regular market hours the next morning. These are known as 11 cash sales for deferred shipment ”, or as 11 sales to arrive.” (3) Many of the members engage either as principals or agents in making on the exchange contracts with other members for the purchase and sale of grain for future delivery by which the seller agrees to deliver in Chicago the grain covered by the contract upon any day of the named month that he shall select. More than 75 per cent, of the volume of all trading in the exchange is for future delivery and under the rules it must be done in the exchange hall and between regular fixed hours; that both buyers CHICAGO BOARD OF TRADE v. OLSEN. 9 1 Statement of the Case. and sellers in all such contracts are personally present when the contracts are made. The bill further avers that all contracts for future delivery are under the rules of the Board fulfilled only by delivery of warehouse receipts for the grain issued by twelve warehouses in Chicago, selected by the Board and having a capacity of 13 million bushels and licensed by the State of Illinois to do a public warehouse business; that the grain is mixed with other grain so that the receipt holder never gets the grain deposited when the receipt was issued; that while a rule of the exchange makes grain in railroad cars deliverable in future cars the last three days of the month, the transaction is not fully completed till the grain in those cars is deposited in a regular warehouse and receipt issued; that in the trading for future delivery more than three-quarters of the many millions of bushels contracted to be delivered are settled for without delivery by offsetting purchases; that a large part of the future trading is done by grain merchants, millers and others only for the purpose of insuring themselves against price fluctuations in respect of like grain owned by them and held for sale, shipment or manufacture and is settled by offsetting. The bill further avers that another large part of future trading is done by speculators, so-called, who make a study of market conditions affecting prices, and try to profit by their judgment as to future prices; that few of such speculators have capital enough to make large single purchases in any way affecting the market; that six-sevenths of all the trading in futures in the country take place in Chicago; that no corners have been run on the exchange for fifteen years, due to the enforcement of rules against them by the Board and “ perhaps to the Sherman Anti-Trust Act;” that manipulation has never been successfully resorted to to depress prices; that the selling of futures has no such effect; that the law of sup 10 OCTOBER TERM, 1922. Statement of the Case. 262 U. S. ply and demand regulates prices and prevents violent fluctuations, and that before hedging was made possible by this future trading the cost of the middleman between producer and consumer was much greater. The defendants filed an answer admitting much of the bill but specifically denying the averments included in the last foregoing paragraph. The plaintiffs submitted a large number of affidavits in support of a motion for a temporary injunction. These contained opinions of many professors of political economy in the colleges of the country to the effect that trading in futures in the long run did not depress prices, but stabilized them. The court denied the motion for a temporary injunction and of its own motion dismissed the bill for want of equity. The conclusions of Congress expressed in the recital of § 3 as to the detriment to interstate commerce from constantly recurring manipulation of sales for future delivery were reached after many years of investigation and examination of witnesses, including the advocates of regulation and those opposed, and men intimately advised in respect to the grain markets of the country. The Senate Committee on Agriculture and Forestry reported to the Senate as follows: “ Every member of a grain exchange who testified before this committee acknowledged that there is at times excessive speculation and undesirable speculation in the futures market. Furthermore, it was brought out that a few big traders at times influence prices—manipulate the market—by the great volume of their operations. Also, it was shown that a continually fluctuating, and not a stable, market is the desire of speculators. Such a market is against the interests of the producer; he must have stable prices in order to market his crops to best advantage. A market without wide and frequent price fluctuations CHICAGO BOARD OF TRADE v. OLSEN. 11 1 Statement of the Case. would greatly benefit the producer. The reason for this is that rapidly fluctuating prices can not be fully reflected in the prices paid at country stations, so an additional margin must be allowed when buying in the country.” Sen. Rep. No. 212, 67th Cong., 1st sess. Witnesses testified before the Committee that a calculation based on commissions showed the total bushels of grain sold for future delivery on the Chicago Board of Trade in a year reach nearly twenty billions and that the amount of grain actually delivered under such contracts is not one per cent, of this. Objectors to future trading insisted at first that future trading put in the hands of desperate speculators an easy opportunity to corner the market and to promote great and rapid fluctuations in value and was wholly vicious and should be forbidden. Further investigation and consideration have satisfied many that the law of supply and demand operated on futures as on cash sales and that futures are very useful in certain respects; notably in offering a means by which through “ hedging,” owners of grain can, to some extent, protect themselves against the danger of losses by fluctuation. The Government did not, in this hearing and argument, maintain that by manipulation the operators can permanently depress the prices of grain but cited the actual quotations from time to time, some as late as the summer of 1922, showing violent fluctuations through “ deals ” of large operators engaged in manipulating the futures market at intervals since 1900, before which corners were ever recurring but since which they have been infrequent. Much evidence was adduced before congressional committees that the sales of futures on the Chicago Board dominated the prices of wheat in this country and the world. The injurious effect of these recurring fluctuations in such futures upon the consignment of grain by owners and producers was asserted by witnesses. Mr. 12 OCTOBER TERM, 1922. Statement of the Case. 262 U. S. Herbert Hoover, whose experience as Food Administrator gave his opinion weight, said to the House Committee on Agriculture (Future Trading Hearings—66th Cong. 3d sess., p. 909-910): “ The second form of manipulation and the one that I feel does at times take place, is the making of a drive on the price by either the sale or the purchase of such quantities as will affect the price by the volume of material coming to the market at that particular time. I would regard those transactions as an attempt to dislocate the normal flow of the law of supply and demand, and any attempt of any individual to dislocate a free market must be against public interest. I feel it is also against the interest of the individual producer, because a drive on the market that depresses the price must find a considerable number of farmers who, through the fall in price and their outstanding obligations, are compelled to liquidate, and they have been done an injury. Incidentally, the commodity has been brought into the market, and an acceleration to depression has been created.” Mr. Julius H. Barnes, the head of the United States Grain Corporation during the War, and of widest experience in the grain markets of the world, at the same hearing, after explaining that future dealing stabilizes prices and helps legitimate hedging and that a drive on prices worked its own cure in the long run, as did the distinguished economists whose affidavits were exhibited in this case, said (pp. 839-840): “ But it is also true that even though such a price depression must be temporary in character it may, during its period of effectiveness, do substantial injustice by forcing the liquidation of grain held on margins, or by the price tendency thus displayed frightening owners otherwise confident of the ultimate value of their goods.” The Federal Trade Commission in its report on wheat prices to the President, December 13, 1920, said, p. 8: CHICAGO BOARD OF TRADE v. OLSEN. 13 1 Statement of the Case. “ Prices of wheat futures, the decline in which has been especially the subject of criticism, are susceptible of manipulation. Wide fluctuations in prices and large discounts of the future price below the cash price have prevailed. This has made it unsatisfactory for ‘hedging,’ and hedging sales may also appear to be manipulative, becalise, if they are large, they may cause sharp depressions. Wheat futures are not functioning well, even according to the standards of their advocates.” Mr. Julius H. Barnes, in his evidence before the Federal Trade Commission, in October, 1922, describes the effect upon interstate commerce of a “ deal ” in May, 1922, wheat on the Chicago Board of Trade, when the price of futures rose rapidly. Large operators collected cash wheat all over the country and headed it for Chicago for delivery at the attractive prices. This took wheat away from all the other wheat centers of the country where it normally would have remained for consumption and accumulated an almost unsalable quantity in Chicago, greatly disturbing the normal and useful flow of wheat in its ordinary and proper distribution and precipitating a crash in prices.1 xIn response to Senate Resolution 133 the Federal Trade Commission prepared to make a report by conducting in October, 1922, an inquiry into the market manipulation of grain. Mr. Julius H. Barnes was a witness, and in the course of his examination said (pp. 74-76): “ Now, in May, 1922, we had the same spectacular gyrations in prices, starting earlier in the month and falling into a complete collapse in price. Why? “ Commissioner Murdock: In the middle of the month this time? “ Mr. Barnes : Yes, starting early in the month, rising to a peak and then falling to an early collapse. Without knowing the facts, because these things are detected by commission merchants, it seems quite clear that there were two or three large lines of wheat bought in Chicago for delivery in May, 1922; that at least one of those, on popular report, was a man who could easily pay for five million bushels of wheat; that he intended to take the wheat as a merchant; 14 OCTOBER TERM, 1922. Statement of the Case. 262 U. S. It was charged before the congressional committees that the limitation of deliveries under contracts for futures to warehouse receipts of twelve regular warehouses aggregating but thirteen million bushels capacity, with the privilege of a tender of grain in cars on the last three days of the delivery month and a power in the board of directors to enlarge the privilege in case of an emergency, casts another element of speculative doubt into the prices of futures and puts too much control in the board of directors. In view of the fact that the total capacity of Chicago for storing grain in public and private warehouses is forty-five millions, it is urged that this rule of the futures market is sinister and dangerous in affecting the prices of a market that are world-wide in their influence by such a narrow limitation of deliveries subject to that he was going to pay cash for it and not squeeze somebody to make a settlement. He expected to get delivery of that, did not buy it in anticipation that it could not be delivered, and therefore he could force a settlement, and he was going to act as a merchant on the belief that wheat was worth more in the world’s markets than the prices then ruling in Chicago; but on top of that there developed that two or three other men, who were evidently clear speculators, not acting with that conception, had also lines of wheat, and the aggregate of those made a shortage in Chicago exceeding the stock of wheat in Chicago or naturally tributary thereto. “ The result of that was that as this situation developed, the buyer, miller or exporter began to get afraid about the Chicago market, that he might have to buy his hedges in higher, and began to buy in those hedges and the market advanced under that kind of apprehensive buying, the buying of legitimate merchants who were frightened to leave their hedges in that month any longer. That helped make the peak, plus perhaps some buying by interested people who wanted to see the price marked up, and those large cash interests in Chicago began to collect all over the country wheat and head it to Chicago for delivery at these attractive prices, which by this time had reached a relation in respect to all of the markets which attracted wheat from every direction to Chicago’. “ The result of that was that by the end of the month there was accumulated in Chicago a stock of ten or twelve million bushels of CHICAGO BOARD OF TRADE v. OLSEN. 15 1 Statement of the Case. arbitrary and uncertain change at the discretion of the Board, and that it is a factor in frightening shippers and lawful hedgers in making opportunity for speculative manipulation and burdening the flow of grain in normal interstate channels.2 wheat, which was beyond the normal absorbing capacity of the consumption trade that rests on Chicago, and that wheat had been lifted by the incentive of these apprehensively made prices from centers where it should have remained for the consumption which normally overtakes it from those centers—Omaha, Kansas City, Minneapolis, all these other points. So that the country stocks which should normally supply mills west of Chicago or south of Chicago were lifted out of their natural place and directed to Chicago by these apprehensively made prices, and there was collected in Chicago an almost unsalable quantity of wheat which could only press in one direction, could not go back. “Commissioner Murdock: So that we had a price collapse by that? ” See also letter of J. H. Barnes to Chicago Board of Trade, p. 69, Grain Futures Hearings before Committee on Agriculture and Forestry, U. S. Senate, 67th Cong., 2d sess., on H. R. 11843, containing the following: “ Present conditions lay an economic burden on distribution cost by drawing wheat to Chicago out of its accustomed channels and from points of supply needed shortly for actual consumption elsewhere. These evil effects are solely from apprehension of a forced settlement at artificial prices on hedges properly used as insurance against price level fluctuations.” 2 Evidence of Julius H. Barnes before Federal Trade Commission in October, 1922 (p. 77), on inquiry in response to Senate Res. No. 133: “ Mr. Barnes : In the demonstration for several years that the chief abuses of the trade were deliberate manipulation and congestion, the deliberate forcing of settlement by artificial prices, the trade step by step tried to make it more difficult for anyone to obtain that control of the market. They made No. 1, 2, 3 wheat, and on all varieties deliverable. That was not sufficient, as demonstrated in Chicago two years ago to the Market Committee of 1917. I suggested to them that the trade ought to seriously consider a widening of the contract basis once more, so as to make wheat at Omaha and Kansas City and Minneapolis, at points of accumulation on the normal 16 OCTOBER TERM, 1922. Argument for Appellants. 262 U. S. Mr. Henry 8. Robbins for appellants. I. This case should be reversed with directions for a decree for appellants upon the authority of Hill v. Wallace, 259 U. S. 44. The new act (§3) presents no reasons that were not before this Court on the former hearing. The provisions of the law, which are material here, are the same. The reasons of Congress for their enactment are the same, and in both cases are brought to the attention of this Court. flow. So that there was not any substantial injustice done a buyer; deliverable at a freight cost difference and a small penalty, so that it would not be abused, and I stand to-day for that as being the one real constructive thing left for the Chicago market to-day, if Chicago is to be the liquid grain future trading market of America, as it should be, if there is a natural advantage in concentrating all the trading of the country in one market, so that you can send an order through and get one hundred thousand or five hundred thousand bushels in a minute, to answer a cable from abroad or a milling order, because the volume of trade there is liquid all the time, and I believe that is in the public interest. “ If it is to do that, then Chicago ought to widen this wedge against these shippers, and it can be done by taking into contract delivery the wheats in these other markets. The effect last May would have been that that wheat would have been delivered, but the wheat itself would have physically been in Omaha and Kansas City and available for milling in June and July, when it was needed, and it would not have been in Chicago to press direct on the east and the world’s market and cause a further decline in price. w Mr. Watkins : Mr. Barnes, what you would include for delivery at Chicago markets you would include for delivery at Seaboard markets, would you not? “ Mr. Barnes : No, I would not, because as I say, on the natural flow, a buyer in Chicago for actual delivery of wheat must in the normal process of trade move that wheat east. His consumption both for export and milling is east of Chicago. Therefore, for him to take delivery west of Chicago at a freight difference and a small penalty is no substantial injustice; but to force him to take wheat at the Seaboard at the transportation cost when maybe he is buying in Chicago to supply a mill in Omaha, might be a very substantial injustice.” CHICAGO BOARD OF TRADE v. OLSEN. 17 1 Argument for Appellants. If there is a distinction broad enough to escape the effect of the former decision, it must lie in the fact that the reasons of Congress are now recited in the act, while in the former case this Court had them from the records of Congress. Such a distinction must rest either on the ground that the recitals in a statute of the reasons of Congress for passing it become conclusive upon the Court, when it is passing upon the constitutionality of the act, or that this Court can fully appraise the reasons of Congress only when they are incorporated into the act. We do not stop to consider whether v the technical doctrine of estoppel is here applicable; nor whether the doctrine of stare decisis is applicable to constitutional questions, because in any event Hill v. Wallace must, so far as applicable, control the decision of this case, unless this Court shall conclude—what we may not assume— that it made a mistake in that case, and should now recede from that decision. II. Future trading on the exchanges does not impose a burden upon interstate commerce. The contrary of this proposition constitutes the key of the arch upon which this law rests. Without it the act clearly falls within the decision in Hill v. Wallace. The recitals of § 3 are not conclusive of this question. When the existence of constitutional power depends on a certain fact or condition, this Court must for itself determine whether that fact or condition really exists. Matter of Jacobs, 98 N. Y. 110; Hairston n. Danville & Western Ry. Co., 208 U. S. 598, 606; Hill v. Wallace, supra; Child Labor Tax Case, 259 U. S. 20. How then is the existence of this essential fact or condition to be ascertained—by the usual legal method of allegation and proof, or by such knowledge as this Court is presumed to have? If the former, then upon this record such obstacle or burden to interstate commerce does not exist; for the bill 51826°—23-------2 18 OCTOBER TERM, 1922. Argument for Appellants. 262 U. S. so alleges, and the case is here upon a demurrer to the bill sustained for want of equity. But as after all this is a question of economic or trade law, which must be resolved more as a matter of expert opinion than by direct proof, it would seem to be a question which this Court could decide upon its own present knowledge of the subject, supplemented by such resort to the writings of trained minds as it shall find necessary. Starting with the proposition that the price fluctuations under consideration are such as are created in sales for future delivery on an exchange, which “ are not in and of themselves interstate commerce,” such prejudicial effect, if any, as these fluctuations may have upon this future trading—which is purely intrastate commerce—or those participating in it, must be put to one side. Our inquiry is to be confined to the effect of these future price fluctuations on such cash sales—including sales “ of cash grain for deferred shipment or delivery ”—as are interstate commerce. We should here start with a clear conception that the prices in these future sales do not fix or determine the prices in cash sales in either intrastate or interstate commerce. The cash price and the future price in the same market will never—or at least only by a rare chance—be the same, except in the delivery month of the future contract. when further trading for delivery in that month usually ceases except for the closing of existing contracts. The cost of carrying the grain from the present time to the future delivery date constitutes one normal element of difference between the “ cash ” price and the price in the futures. So when the future sales contemplate delivery in a month of the next crop year the cash and future prices have no fixed relation to each other because dependent upon different supply conditions. True, the cash prices will not continue below the level determined by a deduction from the future price equal CHICAGO BOARD OF TRADE v. OLSEN. 19 1 Argument for Appellants. to the normal cost of carrying the actual grain until the delivery month; for whenever cash wheat thus falls speculators quickly take advantage of it by buying the cash and selling the future. But the cash price may be, and frequently is, relatively higher than the future price because of some urgent immediate demand of millers or exporters or other reason. So too, there is nothing to compel those who make interstate sales or purchases of grain, to accept as their price the future price or any fixed departure from it. Two persons engage in a cash transaction in grain only when both minds agree upon what the price should be, and this occurs only when each is satisfied to join in a trade at that price. It is, in other words, a price voluntarily arrived at. What is true of an individual sale is equally true of all the sales which go to make up interstate commerce. Doubtless the quotations of prices in future trading constitute a part, and often an important part, of the information upon which the minds of seller and buyer act in agreeing upon their price. But the shipper of grain across state lines will be more influenced by the prices of 11 cash ” grain in his accessible markets, which are seldom actually, and often not relatively, the same as the future prices. We must first ascertain the test or standard by which to determine whether these price fluctuations in intrastate commerce are a burden upon interstate commerce. Nothing may be regarded as a burden upon commerce, which does not prejudicially affect those engaged in it or the public generally. If this country exported all the grains that it raises, it might be said that whatever tends to raise the price is beneficial rather than hurtful, and only such conduct or influences as tended to depress prices should be regarded as a burden upon commerce. But this country consumes the major part of its own grains, 20 OCTOBER TERM, 1922. Argument for Appellants. 262 U. S. and this Court has determined in United States v. Patten, 226 U. S. 525, that a conspiracy of persons to run a “ comer ” and thereby increase prices is so harmful to the public as to be within the Sherman Anti-Trust Act. Hence, what the law contemplates is the free and unrestricted play of the natural law of supply and demand. Only such conduct or influences, therefore, as cause prices in interstate commerce to be other than such as would result from this natural law, are to be here considered in ascertaining what are burdens upon that commerce. This burden may arise, either because such prices are raised above, or depressed below, the normal price. The former could result—if at all—only from the excessive buying of speculators who aim to “ corner ” the markets and thereby force short sellers to settle at a price above the natural price. But “ corners ” in the grain market are “ a thing of the past.” The question is thus reduced to, whether the fluctuations in this future trading are such as to abnormally depress the price of “ cash ” grain in interstate commerce to the prejudice of the producers. The bill avers and the evidence in the Christie Case, 198 U. S. 236, showed that the grain buyers’ profit in moving grain from the farmers to the foreign market— which formerly was from five to eight cents a bushel—had been reduced to not exceeding two cents a bushel by the opportunity afforded by future trading to the grain dealers to insure themselves against price fluctuations by the making of “ hedging ” contracts. Theories respecting speculative trading in grain, which in the past have been deemed by legislators to be economic truths and been made the basis of restrictive legislation, are now conceded to be economic fallacies. No thoughtful •person now contends that on economic grounds public injury results from speculation in grain, or that all future trading on the grain exchanges should be suppressed. CHICAGO BOARD OF TRADE v. OLSEN. 21 1 Argument for Appellants. All that the proponents of this legislation now claim is that11 sudden or unreasonable fluctuations in prices ” in future trading “ frequently occur as the result of speculation, manipulation or control,” and that a depression of prices which results therefrom is “ detrimental to the producers or consumers,” and hence is a burden upon interstate commerce. The short-seller’s only motive is to profit by correctly forecasting the price, at which grain will sell at a future day. He is ever conscious that there are others at hand, who are actuated by a like motive to profit by buying, when the market price is such as to promise profit. Before one can sell he must find some other member of the exchange who, or whose customer, takes a directly opposite view of the probable future price; the quantity bought equals the quantity sold. It is these conflicting views of many traders, which make the market. Thus future trading but expresses the attempts of all participants therein to profit by correctly forecasting the future price. Each is acting under the highest incentive to be right, because of the severe loss that will result from being wrong. They all know that the ultimate factor is the law of supply and demand, as affected by the market conditions when the delivery time arrives. Their sole aim is to correctly appraise the effect of such conditions upon the operation of that law. The claim asserted in § 3 of the Grain Futures Act, that sudden or unreasonable fluctuations in prices frequently occur as the result of speculation, manipulation or control, in future trading, and constitute a burden upon interstate commerce, is negatived by the writings of economists and by the affidavits of twenty or more professors of political economy in our leading universities, which form part of this record. Concurrence of view in the minds of those, who are best qualified to know, clearly establishes (1) that future 22 OCTOBER TERM, 1922. Argument for Appellants. 262 U. S. trading has not produced sudden or unreasonable fluctuations in prices; (2) that such fluctuations do not frequently occur as the result of speculation, manipulation or control; and (3) that such fluctuations as do occur in future trading are not detrimental to the producers or consumers, or a burden upon interstate commerce. Furthermore, there was nothing in the hearings before the committees of Congress preceding the passage of this and the former act to justify these recitals in § 3 of the act. Whatever is intrastate in character must, in order to be a burden upon interstate commerce, (1) directly touch or affect such commerce, and (2) affect it in a substantially injurious way. In other words, it must be a direct and onerous burden upon such commerce. Passenger Cases, 7 How. 402; Hopkins v. United States, 171 U. S. 578; Adair v. United States, 208 U. S. 161; Hooper n. California, 155 U. S. 648; Smith v. Maryland, 18 How. 71; Blumenstock Bros.\. Curtis Publishing Co., 252 U. S. 436; Brodnax v. Missouri, 219 U. S. 285; Merchants Exchange n. Missouri, 248 U. S. 365; Field n. Barber As-phalt Co., 194 U. S. 618. Does this intrastate future trading thus burden interstate commerce? Considered in its entirety, no one claims that it does. All concede that future trading is distinctly helpful to commerce. All that is claimed by the proponents of this legislation is, that the prices made in this future trading at times prejudicially depress prices in interstate transactions in grain. It has already been shown that this is a false premise. But assuming it to be a true one, can it be said that such intrastate prices so directly and materially affect interstate prices as to constitute a burden on interstate commerce? As we have already seen, interstate traders in grain are not obliged to accept, nor do in fact accept, these intrastate prices as the prices in their interstate CHICAGO BOARD OF TRADE v. OLSEN. 23 1 Argument for Appellants. transactions. They constitute but a part of the information upon which such traders act in agreeing upon their prices. If Congress may justify interference with this purely intrastate trading upon the theory of protecting the normal play of the law of supply and demand as respects grain, it may upon the same grounds regulate the numerous exchanges where stocks, eggs, butter and other produce are dealt in, and whose prices are quoted in .the daily press. Thus is presented the question, whether purely intrastate trading becomes subject to the commerce power of Congress merely because it frequently indirectly affects prices in interstate commerce. But there can be no distinction between intrastate prices and anything else of an intrastate character, which affects interstate prices. In other words, the question here is, whether every intrastate employment, business, or condition is within the commerce power of Congress, if it in any way affects prices in interstate commerce. If so, then this Court was wrong in adjudging unconstitutional the first Child Labor Law. If the protection of prices in interstate commerce is to be held to justify the exercise of the interstate commerce power, that power will be enlarged far beyond any present conceptions of it. Wages of labor employed in manufacture and other elements of manufacture materially affect the prices of such manufactured products as subsequently enter into interstate commerce. Is the commerce power broad enough to regulate labor employed in, and other features of, manufacture? This Court in United States v. Knight Co., 156 U. S. 1, 17, stated that combinations which raise or lower prices or wages in domestic enterprise only indirectly affect interstate commerce. See also Railroad Co. v. Richmond, 19 Wall. 584. We do not here contend that Congress may not treat as an obstruction to commerce persons who combine for the purpose of directly fixing or affecting prices in interstate commerce (as in the Addyston Pipe Case, 175 U. S. 24 OCTOBER TERM, 1922. Argument for Appellants. 262 U. S. 211; the Swift Case, 196 U. S. 375, and the Patten Case, 226 U. S. 525), but only that acts which may directly influence prices in intrastate trading in grain for future delivery can only indirectly affect, if at all, the interstate buying and selling of grain for immediate delivery; and that such acts are, therefore, beyond the commerce power of Congress. III. The present act is not one to remove an alleged burden upon interstate commerce. If the condition or subject-matter be partly of an interstate and partly of an intrastate character the commerce power will be judicially confined to that which is interstate. Trade-Mark Cases, 100 U. S. 82. The only qualification to this principle is found where there is such an intermingling that that which is interstate cannot be protected or regulated without also touching that which is intrastate, Minnesota Rate Cases, 230 U. S. 354; Houston, East & West Texas Ry. Co. v. United States, 234 U. S. 342; and here the federal power is limited to the removal of the obstruction. Illinois Central R. R. Co. v. Public Utilities Commission, 243 U. S. 493. Still another phase of the question is presented where the condition or subject matter is wholly within intrastate commerce, but it gives rise to certain incidents or opportunities, which enable evilly disposed persons so to act as to create an obstacle to or burden upon interstate commerce. The commerce power here should—if the spirit of the Constitution is not to be violated—be confined to measures directly aimed at the obstacle and those who create it. Congress may not use such obstacle as a pretext for absorbing complete control of such intrastate commerce in respect to things and persons in no way responsible for the supposed obstacle or burden. The present case falls within this last phase of the question. Again Congress may not compel a trade agency created by a State and not itself participating in the offense— CHICAGO BOARD OF TRADE v. OLSEN. 25 1 Argument for Appellants. as a condition of its continuing to participate in purely intrastate commerce—to actively assist the Nation in the enforcement of its laws—that is, become the police officer or the criminal court of the General Government. The obstacle here claimed is overtrading which prejudices prices in interstate commerce in grain. The grain exchanges never trade at all: they merely maintain halls where others trade. The great majority of the members of exchanges are not guilty of overtrading. The Grain Futures Act does not, in the section (9) which provides for the enforcement of the act through the criminal courts, include as an offense manipulation or overtrading. The act, however, does in fact, in § 6, make an attempt to manipulate a crime. When this is ascertained by the commission which the act creates, the offending person is punished by being deprived of the right to trade on any exchange—which may be his only vocation—and the exchange is required to cooperate in imposing this punishment, as a condition to the exercise of its right to conduct its purely intrastate business. Thus the exchange—which is not guilty of manipulation or overtrading—is punished by this law by being restricted in its right to pursue a lawful business. The act is, therefore, not one to remove an obstruction to commerce, because it does not adopt the only appropriate means for doing so—a statute aimed at those who create the obstacle. See United States v. Dewitt, 9 Wall. 41, where this Court held that Congress could not prohibit the making of some oils in order to increase the production of others that it taxed. IV. The removal of an obstruction to interstate commerce is a mere pretext, under which Congress seeks to regulate what is exclusively intrastate commerce. V. The Grain Futures Act conflicts with the legislative discretion of the. States respecting their intrastate commerce, and is in itself a burden upon that commerce. 26 OCTOBER TERM, 1922. Argument for Appellants. 262 U. S. VI. The act cannot be sustained under the power of Congress to establish post offices, or under its control of interstate communication by telegraph or telephone. The purpose in this connection is not to exclude from such avenues of communication a message or letter or quotation that is false or obscene or fraudulent in itself or will promote fraud or other illegal conduct. It is to compel the exchange to accept designation as a contract market by denying its members, if the exchange refuses so to qualify, the privilege of communicating with their customers through the mails or by interstate telegram or telephone. The prohibition is in the nature of a penalty. It is one of the enforcing provisions of the act. Ex parte Jackson, 96 U. S. 727; In re Rapier, 143 U. S. 110; Lewis Publishing Co. v. Morgan, 229 U. S. 288; Burton v. United States, 202 U. S. 344, 371; Hoover v. McChesney, 81 Fed. 472; Western Union Tel. Co. v. Foster, 247 U. S. 114; Hammer n. Dagenhart, 247 U. S. 251. VII. The insurance feature. Section 3 of the act recites that future contracts are utilized by shippers and dealers engaged in interstate commerce “ as a means of hedging themselves against possible loss through fluctuations in price.” Section 4 of the act makes it unlawful for any person to make a contract of sale upon an exchange “ which is or may be used for hedging any transactions in interstate commerce in grain,” except it be made through a member of a “ contract market.” These provisions’seem to be based upon the theory that, because those who ship grain in interstate commerce resort to future trading to get insurance, future trading is thereby subject to the interstate commerce power. But this Court has held that the business of insurance is not commerce, nor an instrumentality of commerce, but a mere incident thereto. CHICAGO BOARD OF TRADE v. OLSEN. 27 1 Argument for Appellants. VIII. The provision of the act, § 5 (e), requiring exchanges to admit to membership representatives of cooperative associations of producers, and sanctioning “ patronage dividends,” deprives the Board of Trade and its members of their property without due process of law. This identical provision was in the Future Trading Act, and was by this Court held to be not within the commerce power of Congress. The reasons alleged for reenacting some of the provisions of the former act, and which are thought to justify the new act, have no application to this particular provision. But this provision is also unconstitutional upon the further ground that it violates the due process provision of the Constitution. It has never been held, even as respects modern common carriers, that any person could be legislated into a position where he might share with the owners the profits accruing from the use of their property in public service. The power to impress property with a public use is, as respects a State, “ an exercise of the police power of the State.” Budd v. New York, 143 U. S. 545; Lawton v. Steele, 152 U. S. 133-137. Congress may exercise such power only so far as it is included in the other powers conferred on it by the Constitution. Hamilton v. Kentucky Distilleries, 251 U. S. 146; United States v. Cruikshank, 92 U. S. 542; Tennessee v. Davis, 100 U. S. 257. Again, this power, as respects any particular object, must reside exclusively either in the State or in Congress; it cannot well reside in both without producing conflicting statutes. The property of this Board is situated in Illinois, the Board transacts no business upon its property, and the business that it permits its members to transact thereon is mostly of a domestic and local, as distinguished from an interstate, character; and it seems that the power to impress this property with a public use ought to belong to the State of Illinois alone. 28 OCTOBER TERM, 1922. Argument for Appellants. 262 U. S. Again, this section 5 (e) is in no sense a proper exercise of the power. In all cases where the property involved is privately owned, the only interest therein that a statute may grant to the public (without paying for the property) is the right of all to share in the service it renders on fair and common terms. This section is not for the benefit of the public generally, but only a certain class—farmers’ organizations. What the Grain Futures Act does is to force agents of farmers’ organizations into membership in the exchanges, so that all farmers who join cooperative associations may escape the payment of the commissions— which all others must pay—and thereby indirectly share in the profit which accrues from the rendering of the service—a profit which has resulted to the members of the exchanges from the creation and maintenance for many years (at private expense of money and effort) of these instrumentalities of trade. This instrumentality or privately owned property, and the profit accruing from its use, like the grain elevator or insurance company, and the profit therefrom, belong to those who have created and own it. Any statute which takes private property for a private purpose—as well as one which takes property for a public use without the payment of adequate consideration— violates the due process clause of the Fifth or Fourteenth Amendments to the Constitution. Missouri Pacific Ry. Co. n. Nebraska, 164 U. S. 403; Missouri, etc., Ry. Co. v. Nebraska, 217 U. S. 196; Chicago, Mil. & St. P. Ry. Co. v. Wisconsin, 238 U. S. 491; Eubank v. Richmond, 226 U. S. 137; Cole v. La Grange, 113 U. S. 1. The Fifth Amendment applies to an intangible right as well as to tangible property. Monongahela Co. v. United States, 148 U. S. 312, 343; Oklahoma n. Kansas Natural Gas Co., 221 U. S. 229, 253. Again, any statute which materially impairs the value or profitable use of private property is as much a taking CHICAGO BOARD OF TRADE v. OLSEN. 29 1 Argument for Appellants. within the due process provision as the actual appropriation of it. Peabody v. United States, 231 U. S. 530; Filor v. United States, 9 Wall. 45, 49. Indeed, a pecuniary loss need not be shown. If the right of property is invaded, the statute is within the constitutional provision. Buchanan v. Warley, 245 U. S. 60, 74. IX. Section 6 of the act violates the due process of law provision of the Constitution. This section provides that any person who “ is violating any of the provisions of this Act, or is attempting to manipulate the market price of any grain in violation of the provisions of section 5 hereof, or of any of the rules or regulations made pursuant to its requirements,” shall upon the complaint of the. Secretary of Agriculture be tried before a commission consisting of such Secretary and two other cabinet officers (all of whom are appointed by, and hold office during the will of, the President), and if found guilty, the commission may punish him by depriving him of all trading privileges upon all “ contract markets ” “ for such period as may be specified in said order,” which may be permanently. As speculating in grain and acting as agent for such speculators are recognized by the law to be lawful vocations, and as the right to pursue any lawful vocation— sometimes called “ the liberty of pursuit ”—is a part of the liberty which the Constitution guarantees to every citizen, it follows that the punishment here authorized is a deprivation of liberty within the meaning of that term in the due process clause. Considering the offense created by, and the punishment provided therefor in, § 6, a trial by this commission appointed by the President, is not “ due process of law.” Ex parte Milligan, 4 Wall. 2; Wong Wing v. United States, 163 U. S. 228; Huber v. Reily, 53 Pa. St. 112; Ex 30 OCTOBER TERM, 1922. Argument for Appellants. 262 TJ. S. parte Randolph, Fed. Cas. No. 11,558; Ong Chang Wing v. United States, 218 U. S. 272; Kilbourn v. Thompson, 103 U. S. 168; State v. Ryan, 70 Wis. 676; Parsons n. Russell, 11 Mich. 113; Addison v. State, 126 Pac. 840; Bessette n. Conkey Co., 194 U. S. 324. Within authoritative definitions, attempts to manipulate, or other violation of the Grain Futures Act, clearly constitute crimes, which are punished solely in the interest of the general public. By depriving the violator of a part of his liberty it penalizes him for a wrong done to the public. In this particular it is no less a criminal statute because, instead of compelling the wrong-doer to pay a money penalty or sending him to jail, it deprives him of his constitutional right to earn a living by trading on an exchange. Section 6 authorizes the commission to punish one 11 violating any of the provisions of the act.” Section 9 of the act declares a like violation a misdemeanor and punishable by a fine not exceeding $10,000, or imprisonment not exceeding a year, or both. Section 9 contemplates a conviction in a criminal prosecution in the District Court. If violating any of the provisions of the act is a crime under § 9 it cannot be less so under § 6. By declaring in one section that the forbidden act is a misdemeanor and not doing so in another section, Congress cannot make the same act at once a crime and not a crime within the Constitution. Schick v. United States, 195 U. S. 65; Passavant v. United States, 148 U. S. 214; Origet n. Hedden, 155 U. S. 228; Oceanic Steam Nav. Co. v. Stranahan, 214 U. S. 320; Callan v. Wilson, 127 U. S. 540; Murray v. Hoboken Co., 18 How. 277; United States v. Cohen Grocery Co., 255 U. S. 81. Section 6 also violates the Constitution in not being confined to such attempts to manipulate as prejudicially affect interstate commerce. Trade-Mark Cases, 100 U. S. 82. CHICAGO BOARD OF TRADE v. OLSEN. 31 1 Opinion of the Court, f It is hardly conceivable that the Constitution, in conferring interstate commerce power on Congress, intended to authorize it to exact licenses from every person engaged in making intrastate contracts for future delivery and make them revocable by an executive officer as a means of preventing some from obstructing interstate commerce. It is therefore submitted that § 6 of the act, so far as it confers on this commission jurisdiction to try persons for overtrading, ‘ and to punish them by depriving them of the right to resort to the exchanges, is unconstitutional. This question directly arises on this appeal; for the suit is not merely one by the Board of Trade, but also by seven members of the Board (suing on behalf of all of them) to restrain a public official (the Secretary of Agriculture) from enforcing, as prosecutor, what is a criminal provision—it being, as the bill alleges, his purpose to enforce it. Mr. Solicitor General Beck, with whom Mr. Blackburn Esterline, Assistant to the Solicitor General, Mr. R. W. Williams and Mr. Fred Lees were on the brief, for appellees. Mr. Chief Justice Taft, after stating the case as above, delivered the opinion of the Court. Appellants contend that the decision of this Court in Hill v. Wallace, 259 U. S. 44, is conclusive against the constitutionality of the Grain Futures Act. Indeed in their bill they pleaded the judgment in that case as res judicata in this, as to its invalidity. The act whose constitutionality was in question in Hill v. Wallace was the Future Trading Act (c. 86, 42 Stat. 187). It was an effort by Congress, through taxing at a prohibitive rate sales of grain for future delivery, to regulate such sales on boards of trade by exempting them from the tax if they would comply with the congressional regulations. It was 32 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. held that sales for future delivery where the parties were present in Chicago, to be settled by offsetting purchases or by delivery, to take place there, were not interstate commerce and that Congress could not use its taxing power in this indirect way to regulate business not within federal control. We said (p. 68): “ Looked at in this aspect and without any limitation of the application of the tax to interstate commerce, or to that which the Congress may deem from evidence before it to be an obstruction to interstate commerce, we do not find it possible to sustain the validity of the regulations as they are set forth in this act. A reading of the act makes it quite clear that Congress sought to use the taxing power to give validity to the act. It did not have the exercise of its power under the commerce clause in mind and so did not introduce into the act the limitations which certainly would accompany and mark an exercise of the power under the latter clause.” Again, on page 69, we said: “ It follows that sales for future delivery on the Board of Trade are not in and of themselves interstate commerce. They can not come within the regulatory power of Congress as such, unless they are regarded by Congress, from the evidence before it, as directly interfering with interstate commerce so as to be an obstruction or a burden thereon.” The Grain Futures Act which is now before us differs from the Future Trading Act in having the very features the absence of which we held in the somewhat carefully framed language of the foregoing quotations prevented our sustaining the Future Trading Act. As we have seen in the statement of the case, the act only purports to regulate interstate commerce and sales of grain for future delivery on boards of trade because it finds that by manipulation they have become a constantly recurring burden and obstruction to that commerce. Instead, CHICAGO BOARD OF TRADE v. OLSEN. 33 1 Opinion of the Court. therefore, of being an authority against the validity of the Grain Futures Act, it is an authority in its favor. The Chicago Board of Trade is the greatest grain market in the world. Chicago Board of Trade v. United States, 246 U. S. 231, 235. Its report for 1922 shows that on that market in that year were made cash sales for some three hundred and fifty millions of bushels of grain, most of which was shipped from States west and north of Illinois into Chicago, and was either stored temporarily in Chicago or was retained in cars and after sale was shipped in large part to eastern States and foreign countries. This great annual flow is made up of the cash grain sold on the exchange, the cash sales to arrive (Chicago Board of Trade v. United States, 246 U. S. 231), and the comparatively small percentage of grain contracted to be sold in the futures market not settled by offsetting. Chicago Board of Trade n. Christie Grain & Stock Co., 198 U. S. 236, 248. The railroads of the country accommodate themselves to the interstate function of the Chicago market by giving shippers from western States bills of lading through Chicago to points in eastern States with the right to remove the grain at Chicago for temporary purposes of storing, inspecting, weighing, grading, or mixing, and changing the ownership, consignee or destination and then to continue the shipment under the same contract and at a through rate. Bacon v. Illinois, 227 U. S. 504. Such a contract does not prevent the local taxing of the grain while in Chicago; but it does not take it out of interstate commerce in such a way as to deprive Congress of the power to regulate it, as is plainly intimated in the authority cited (p. 516) and expressly recognized in Stafford v. Wallace, 258 U. S. 495, 525, 526. The fact that the grain shipped from the west and taken from the cars may have been stored in warehouses and mixed with other grain, so that the owner receives other grain when presenting his receipt for con-518260—23------3 34 OCTOBER TERM, 1922. Opinion of the Court. 262U.S. tinning the shipment, does not take away from the interstate character of the through shipment any more than a mixture of the oil or gas in the pipe lines of the oil and gas companies in West Virginia, with the right in the owners to withdraw their shares before crossing state linos, prevented the great bulk of the oil and gas which did thereafter cross state lines from being a stream or current of interstate commerce. Eureka Pipe Line Co. v. Hallanan, 257 U. S. 265, 272; United Fuel Gas Co. v. Hallanan, 257 U. S. 277, 281. It is impossible to distinguish the case at bar, so far as it concerns the cash grain, the sales to arrive, and the grain actually delivered in fulfillment of future contracts, from the current of stock shipments declared to be interstate commerce in Stafford v. Wallace, 258 U. S. 495. That case presented the question whether sales and purchases of cattle made in Chicago at the stockyards by commission men and dealers and traders under the rules of the stockyards corporation could be brought by Congress under the supervision of the Secretary of Agriculture to prevent abuses of the commission men and dealers in exorbitant charges and other ways, and in their relations with packers prone to monopolize trade and depress and increase prices thereby. It was held that this could be done even though the sales and purchases by commission men and by dealers were in and of themselves intrastate commerce, the parties to sales and purchases and the cattle all being at the time within the city of Chicago. We said (pp. 515, 516) : “ The stockyards are not a place of rest or final destination. Thousands of head of live stock arrive daily by carload and trainload lots, and must be promptly sold and disposed of and moved out to give place to the constantly flowing traffic that presses behind. The stock-yards are but a throat through which the current flows, CHICAGO BOARD OF TRADE v. OLSEN. 35 1 Opinion of the Court. and the transactions which occur therein are only incident to this current from the West to the East, and from one State to another. Such transactions can not be separated from the movement to which they contribute and necessarily take on its character. The commission men are essential in making the sales without which the flow of the current would be obstructed, and this, whether they are made to packers or dealers. The dealers are essential to the sales to the stock farmers and feeders. The sales are not in this aspect merely local transactions. They create a local change of title, it is true, but they do not stop the flow; they merely change the private interests in the subject of the current, not interfering with, but, on the contrary, being indispensable to its continuity. The origin of the live stock is in the West, its ultimate destination known to, and intended by, all engaged in the business is in the Middle West and East either as meat products or stock for feeding and fattening. This is the definite and well-understood course of business. The stockyards and the sales are necessary factors in the middle of this current of commerce.” This case was but the necessary consequence of the conclusions reached in the case of Swift & Co. v. United States, 196 U. S. 375. That case was a milestone in the interprétation of the commerce clause of the Constitution. It recognized the great changes and development in the business of this vast country and drew again the dividing line between interstate and intrastate commerce where the Constitution intended it to be. It refused to permit local incidents of great interstate movement, which taken alone were intrastate, to characterize the movement as such. The Swift Case merely fitted the commerce clause to the real and practical essence of modern business growth. It applies to the case before us just as it did in Stafford v. Wallace. The distinction that the exchange of the Chicago Board of Trade building is not within the same enclosure as the 36 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. railroad yards and warehouses in which the grain is received and stored on its way from the West to the East as it is being sold on the exchange, while the stockyards exchange and the actual receipt and shipment of cattle are within the same fence, surely can make no difference in the application of the principle. The sales on the Chicago Board of Trade are just as indispensable to the continuity of the flow of wheat from the West to the mills and distributing points of the East and Europe, as are the Chicago sales of cattle to the flow of stock toward the feeding places and slaughter and packing houses of the East. The question under this act is somewhat different in form and detail from that in the Stafford Case, but the result must be the same. It is not the sales and deliveries of the actual grain which are the chief subject of the supervision of federal agency by Congress in the Grain Futures Act although a record of cash sales is required and a corner in cash sales would be a violation of it, and there are other provisions equally regulatory of them. It is the contracts of sales of grain for future delivery, most of which do not result in actual delivery but are settled by offsetting them with other contracts of the same kind, or by what is called “ ringing.” Chicago Board of Trade v. Christie Grain & Stock Co., 198 U. S. 236, 246-247. The question is whether the conduct of such sales is subject to constantly recurring abuses which are a burden and obstruction to interstate commerce in grain? And further, are they such an incident of that commerce and so intermingled with it that the burden and obstruction caused therein by them can be said to be direct? In United States v. Ferger, 250 U. S. 199, the question was of the validity of a statute of Congress punishing the forging of bills of lading used in interstate commerce, and altering them. The lower court had dismissed an indictment charging the offense denounced in the statute, CHICAGO BOARD OF TRADE v. OLSEN. 37 1 Opinion of the Court. on the ground that Congress could only deal with real bills of lading where there was an actual shipment in interstate commerce and had no power to punish a fraud and fiction where there was no such commerce, and where the bills of lading whose fabrication was the subject of complaint were mere pieces of paper fraudulently inscribed, and did not relate to any actual interstate commerce. This Court, speaking through Chief Justice White, rejected the view of the lower court, on the ground that interstate commerce would be directly impaired and weakened by the unrestrained right to fabricate and circulate spurious bills of lading apparently connected with such commerce. The Court, in Stafford v. Wallace, supra, adopted and applied this principle and said, 258 U. S. 521: “ Whatever amounts to more or less constant practice, and threatens to obstruct or unduly to burden the freedom of interstate commerce is within the regulatory power of Congress under the commerce clause, and it is primarily for Congress to consider and decide the fact of the danger and meet it. This court will certainly not substitute its judgment for that of Congress in such a matter unless the relation of the subject to interstate commerce and its effect upon it are clearly non-existent.” In the act we are considering, Congress has expressly declared that transactions and prices of grain in dealing in futures are susceptible to speculation, manipulation and control which are detrimental to the producer and consumer and persons handling grain in interstate commerce and render regulation imperative for the protection of such commerce and the national public interest therein. It is clear from the citations, in the statement of the case, of evidence before committees of investigation as to manipulations of the futures market and their effect, that we would be unwarranted in rejecting the finding 38 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. of Congress as unreasonable,, and that in our inquiry as to the validity of this legislation we must accept the view that such manipulation does work to the detriment of producers, consumers, shippers and legitimate dealers in interstate commerce in grain and that it is a real abuse. But it is contended that it is too remote in its. effect on interstate commerce, and that it is not like the direct additions to the cost of the producer of marketing cattle by exorbitant charges and discrimination of commission men and dealers, as in Stafford v. Wallace. It is said there is no relation between prices on the futures market and in the cash sales. This is hardly consistent with the affidavits the plaintiffs present from the leading economists, already referred to, who say that dealing in futures stabilizes cash prices. It is true that the curves of prices in the futures and in the cash sales are not parallel and that sometimes one is higher and sometimes the other. This is to be expected because futures prices are dependent normally on judgment of the parties as to the future, and the cash prices depend on present conditions, but it is very reasonable to suppose that the one influences the other as the time of actual delivery of the futures approaches, when the prospect of heavy actual transactions at a certain fixed price must have a direct effect upon the. cash prices in unfettered sales. The effect of such a “ deal ” as that of May, 1922, as explained by Mr. J. H. Barnes, shows this clearly and illustrates in a striking way the direct effect of such manipulation in disturbing the actual normal flow of grain in interstate commerce most injuriously. Mr. Barnes also points out the effect of the operation of the rule limiting deliveries to warehouse receipts from warehouses selected by the directors of the Board whose unregulated power to suspend or modify the rule pending settlement, adds to the speculative character of the market and frightens consignors. CHICAGO BOARD OF TRADE v. OLSEN. 39 1 Opinion of the Court. More than this, prices of grain futures are those upon which an owner and intending seller of cash grain is influenced to .sell or not to sell as they offer a good opportunity to him to hedge comfortably against future fluctuations. Manipulations of grain futures for speculative profit, though not carried to the extent of a corner or complete monopoly, exert a vicious influence and produce abnormal and disturbing temporary fluctuations of prices that are not responsive to actual supply and demand and discourage not only this justifiable hedging but disturb the normal flow of actual consignments. A futures market lends itself to such manipulation much more readily than a cash market. In the case of United States v. Patten, 226 U. S. 525, an indictment charged a conspiracy to run a corner by making purchases of quantities of cotton for future delivery, by means of which the conspirators were to secure control of the available supply of cotton in the country and enhance the price of cotton at will. It was contended that even if the necessary result of this was an obstruction of interstate trade, it was so indirect as not to constitute a restraint of it within the Federal Anti-Trust Law under which the indictment was drawn. This Court held otherwise and sustained the indictment. Corners in grain through trading in futures have not been so frequent as they were before 1900, due, as the plaintiffs aver, to the stricter rules of the Board of Trade as to futures and to the Sherman Anti-Trust Act, though they do seem to have since occurred infrequently. The fact that a corner in grain is brought about by trading in futures shows the direct relation between cash prices and actual commerce on the one hand, and dealing in futures on the other, because a corner is not a monopoly of contracts only, it is a monopoly of the actual supply of grain in commerce. It was this direct relation that led to the decision in the Patten Case. If a comer and the enhance- 40 OCTOBER TERM, 1922. Opinion of the Court. 262U.S. ment of prices produced by buying futures directly burden interstate commerce in the article whose price is enhanced, it would seem to follow that manipulations of futures which unduly depress prices of grain in interstate commerce and directly influence consignment in that commerce are equally direct. The question of price dominates trade between the States. Sales of an article which affect the country-wide price of the article directly affect the country-wide commerce in it. By reason and authority, therefore, in determining the validity of this act, we are prevented from questioning the conclusion of Congress that manipulation of the market for futures on the Chicago Board of Trade may, and from time to time does, directly burden and obstruct commerce between the States in grain, and that it recurs and is a constantly possible danger. For this reason, Congress has the power to provide the appropriate means adopted in this act by which this abuse may be restrained and avoided. The next provision of the act which is attacked as invalid is that which forbids a board, designated as a contract market, from excluding from membership in, and all privileges on, its exchanges any duly authorized representative of a lawfully formed and conducted association of producers having adequate financial responsibility, engaged in the cash grain business, and complying or agreeing to comply with the terms and conditions lawfully imposed on the other members, and which bars any rule forbidding the return by such association of the commissions of its representative, less expenses, to the bona fide members of the cooperative association in proportion to their consignments of grain to the exchange. It is said that this will impair the value of membership in the Board and will take the property of the members without due process of law. The Board of Trade conducts a business which is affected with a public interest and is, therefore, subject to CHICAGO BOARD OF TRADE v. OLSEN. 41 1 Opinion of the Court. reasonable regulation in the public interest. The Supreme Court of Illinois has so decided in respect to its publication of market quotations. New York & Chicago Grain Exchange v. Chicago Board of Trade, 127 Ill. 153. In view of the actual interstate dealings in cash sales of grain on the exchange, and the effect of the conduct of the sales of futures upon interstate commerce, we find no difficulty under Munn v. Illinois, 94 U. S. 113, 133, and Stafford v. Wallace, supra, in concluding that the Chicago Board of Trade is engaged in a business affected with a public national interest and is subject to national regulation as such. Congress may, therefore, reasonably limit the rules governing its conduct with a view to preventing abuses and securing freedom from undue discrimination in its operations. The incidental effect which such reasonable rules may have, if any, in lowering the value of memberships does not constitute a taking, but is only a reasonable regulation in the exercise of the police power of the National Government. Congress evidently deems it helpful in the preservation of the vital function which such a board of trade exercises in interstate commerce in grain that producers and shippers should be given an opportunity to take part in the transactions in this world market through a chosen representative. Nor do we see why the requirement that the relation between them and this representative, looking to economy of participation on their part by a return of patronage dividends, should not be permissible because facilitating closer participation by the great body of producers in transactions of the Board which are of vital importance to them. It would seem to make for more careful supervision of those transactions in the national public interest in the free flow of interstate commerce. Under the present rules of the Board, corporations are permitted to enjoy the benefit of membership by reason of the membership of two of their executive officers who are bona fide stockholders, and all their stock- 42 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. holders are thus given a chance to enjoy the commissions earned and the benefits to the corporation of other membership privileges to the extent of their stock ownership. The provisions of the act objected to are to be sustained on the principles laid down in House v. Mayes, 219 U. S. 270; Brodnax v. Missouri, 219 U. S. 285, and Grisim v. South St. Paul Live Stock Exchange, 152 Minn. 271. We think the objection to this feature of the act untenable. We do not find it necessary to our decree in this case to consider the constitutional objections made in the bill to that part of the fourth section which forbids the use of the mails and interstate facilities of communication to offer or accept sales for future deliveries or to send quotations- of prices thereof except through members of a board of trade, because the plaintiffs are not affected thereby. Section 10 of the act reads as follows: “ If any provision of this Act or the application thereof to any person or circumstances is held invalid, the validity of the remainder of the Act and of the application of such provision to other persons and circumstances shall not be affected thereby.” The unconstitutionality of these provisions, if they be unconstitutional, would, therefore, not invalidate the rest of the act. Section 9 declares it to be a misdemeanor for a member of a designated board of trade to fail to evidence any contract mentioned in § 4 by a record in writing as therein required. This is only a legitimate means of enforcing the statutory regulations of the Board of Trade which we have found to be within the power of Congress. As to the power of Congress to provide in § 9 for the punishment of any one who shall knowingly or carelessly deliver through the mail or interstate means of communication false or misleading crop or market reports, it will be time enough for us to consider its existence when some one is charged with the offense and is brought to trial therefor. The plaintiffs present no such case. PRENDERGAST v. N. Y. TEL. CO. Syllabus. 43 1 Paragraph (b) of § 6 which gives to the Commission the power, on complaint after investigation by the Secretary of Agriculture, and after a hearing, to exclude from all contract markets any person violating any of the provisions of the act or attempting to manipulate the market price of any grain in violation of the provisions of § 5 of the act or of any of the rules or regulations made in pursuance to its requirements, is attacked as invalid because a jury trial is not afforded. The plaintiffs do not aver that they are committing acts which will subject them to such exclusion, or that charges have been made and proceedings have been begun or are about to be begun against them by the Secretary of Agriculture. Until they are thus in danger of suffering prejudice from the operation of the paragraph, they can not invoke our decision as to its validity. For the reasons given the decree of the District Court is Affirmed. Mr. Justice McReynolds and Mr. Justice Sutherland dissent. PRENDERGAST ET AL., CONSTITUTING THE PUBLIC SERVICE COMMISSION OF THE STATE . OF NEW YORK, ET AL. v. NEW YORK TELEPHONE COMPANY. APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK. No. 542. Argued February 21, 1923.—Decided April 16, 1923. 1. The fact that a public service commission, seven months after it had been temporarily enjoined from enforcing rates fixed by it provisionally for a public service corporation, made final orders fixing rates yielding a much higher return, does not, without more, establish that the former rates were confiscatory when they were made, and does not, therefore, constitute a sufficient basis for dismissing, on motion, an appeal from the temporary injunction. P. 46. 44 OCTOBER TERM, 1922. Syllabus. 262 U. S. 2. The District Court, constituted of three judges, has jurisdiction, under Jud. Code, § 266, to enjoin the enforcement of rates ordered by a public commission, upon the ground that the order is unconstitutional. P. 47. Oklahoma Natural Gas Co. v. Russell, ' 261 U. S. 290. 3. A bill to enjoin enforcement of rates, as confiscatory, properly alleges the ultimate facts upon which the claim of confiscation is based, omitting mere statements of evidence. Equity Rule 25, par. 3. P. 47. 4. In the matter of fixing telephone rates, the Public Service Commis-sion of New York is vested with the final legislative authority of the State, review by the state courts by certiorari being purely judicial. Laws N. Y. 1920, c. 925, §§ 1304, 1305, pp. 437, 438. P. 48. 5. Under the New York Public Service Commission Law, an application to the Commission for a rehearing is allowed, but not required, does not excuse compliance with the Commission^ order or its enforcement, except as the Commission may direct, and is addressed entirely to the discretion of the Commission; and any change that may be made upon rehearing does not affect the enforcement of any right arising from the original order. Held, that a telephone company, complaining that rates fixed by the Commission were confiscatory, need not apply to it for a rehearing before resorting to the federal court for an injunction, and that failure so to apply was manifestly no ground for denying a temporary injunction, when the Commission by its answer insisted that the orders in question were correct. P. 48. 6. For like reasons, it was not necessary that the complaining company should first have exercised the privilege granted by one of the orders, of applying to the Commission for a modification of a classification affecting the rates. P. 49. - , 7. The fact that rates prescribed are temporary, to be effective only until the final determination by the Commission, does not prevent resort to the Court to restrain their enforcement pending the continuance and completion of the rate-making process. P. 49. 8. To sustain an application for an order temporarily restraining enforcement of rates challenged as confiscatory, the plaintiff is not obliged to offer in evidence testimony taken by the Commission which fixed the rates. P. 50. 9. A temporary injunction should be sustained on appeal when not contrary to equity or the result of improvident exercise of judicial discretion, and especially when the balance of injury as between the parties favors its issue. P. 50. PRENDERGAST v. N. Y. TEL. CO. 45 43 Opinion of the Court. 10. The evidence in this case was sufficient without a practical test of the rates involved. P. 51. Affirmed. Appeal under Jud. Code, § 266, from an order of the District Court temporarily restraining enforcement of orders of the New York Public Service Commission prescribing maximum telephone rates. Mr. Simon Fleischmann and Mr. Wilber W. Chambers, with whom Mr. Carl Sherman, Attorney General of the State of New York, Mr. Ledyard P. Hale and Mr. Martin Clark were on the briefs, for appellants. Mr. John W. Davis, with whom Mr. Charles T. Russell and Mr. Nathaniel T. Guernsey were on the brief, for appellee. Mr. George P. Nicholson, Mr. M. Maidwin Fertig and Mr. Harry Hertzofi, by leave of court, filed a brief on behalf of the City of New York, as amici curiae. Mr. Justice Sanford delivered the opinion of the Court. This is an appeal, under § 266 of the Judicial Code, from an order of the District Court enjoining pendente lite the enforcement of orders of the Public Service Commission of New York prescribing maximum rates for the exchange service of the Telephone Company. The Commission, having entered upon an investigation as to the rates charged by the Company for telephone service within the State, on March 3, 1922, after a large amount of evidence had been taken, but before the hearings had been completed, made the two orders in question. One of these reduced temporarily, pending final determination, the maximum rates to be charged by the Company after April 1, for exchange telephone service in the City of New York. The other made a like reduc- 46 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. tion in the maximum rates for such service in other municipalities within the State, which were divided into groups, with basic area rates in each; with a further provision that either the Company or any municipality affected might apply for modification of the classifications on or before April 15. The Company on March 29 filed its bill in the District Court against the Commission, its counsel and the Attorney General of the State, for the purpose of enjoining the enforcement of these orders, upon the ground that they were confiscatory and in violation of the Fourteenth Amendment. An application for an interlocutory injunction was heard by three judges; and the court as thus constituted on June 12 granted an interlocutory order enjoining the defendants from enforcing the orders of the Commission pending the final hearing and until the further order of the court; the Company being required to give bond for $6,000,000 to secure the repayment to its subscribers of all excess charges paid pending the suit in the event the injunction should thereafter be dissolved. From this interlocutory order the defendants have appealed directly to this Court. Since the argument on the appeal the Company has submitted a motion to dismiss the appeal or affirm the order of the court, upon the ground that on January 25, 1923, the Commission made final orders in the pending investigation establishing a schedule of telephone rates for the State which will yield the Company a much higher annual return than the temporary rates whose enforcement was enjoined. This, it is insisted, shows that the injunction was properly granted.1 The fact that the *The motion, which is supported by affidavits, alleges that the annual return which will be afforded by the rates established by the final orders of the Commission will exceed by not less than $2,000,000 the revenue afforded by the rates which were in effect before the Commission prescribed the temporary rates in question, and by about $5,000,000 the revenue which would have been afforded by such temporary rates. PRENDERGAST v, N. Y. TEL. CO. 47 43 Opinion of the Court. Commission has, more than seven months after the injunction was granted, made orders allowing higher rates— whose correctness may yet be questioned in appropriate proceedings for review—upon evidence not before us, does not establish that the injunction was rightly granted under the conditions which then existed. See Cumberland Telephone Co. v. Louisiana Commission (D. C.), 283 Fed. 215, 218. Hence the motion is denied. The appellants urge, in substance, as grounds of error: That the special court of three judges had no jurisdiction to grant the injunction; that the bill contained insufficient averments of fact, as distinguished from mere conclusions; that it was prematurely filed; and that the injunction was granted upon insufficient evidence. We conclude: 1. The specially constituted court of three judges had jurisdiction under § 266 of the Judicial Code to hear and determine the application for the injunction upon the ground of the unconstitutionality of the orders of the Commission. Oklahoma Natural Gas Co. v. Russell, 261 U. S. 290. 2. The defendants answered the bill on the merits without questioning in any way the sufficiency or form of its averments. See Campbell v. United States, 224 U. S. 99, 106. The bill specifically alleged that the cost of the Company’s property in the State devoted to the rendition of intrastate telephone service, the cost of its reproduction, and its fair and reasonable value exceeded the sums of $247,000,000, $373,000,000 and $323,000,000, respectively; and that the rates prescribed by the Commission would prevent it from earning more than 2.56% per annum upon the cost of such property and 1.96% upon its fair and reasonable value, and would not afford it a fair return upon such value. In short, it aptly stated the ultimate facts upon which the Company asked relief, 48 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. omitting any mere statements of evidence. 25th Equity Rule, par. 3. 3. Upon the making by the Commission of the orders in question the proceedings had reached the judicial stage entitling the Company to resort to the court for relief. Bacon n. Rutland Railroad, 232 U. S. 134, 137; distinguishing Prentis v. Atlantic Coast Line Co., 211 U. S. 210, 229, in which an appeal had not been taken to the highest tribunal vested with the final legislative authority of the State. Here the Commission is vested with the final legislative authority of the State in the rate-making process; the authority exercised by the state courts upon a review by certiorari {People v. Wilcox, 194 N. Y. 383), being purely judicial and having no legislative character. Laws, New York, 1920, c. 925, §§ 1304, 1305, pp. 437, 438. It was not necessary that the Company should apply to the Commission for a rehearing before resorting to the court. While under the Public Service Commission Law any person interested in an order of the Commission has the right to apply for a rehearing, the Commission is not required to grant such rehearing unless in its judgment sufficient reason therefor appear; the application for the rehearing does not excuse compliance with the order or its enforcement except as the Commission may direct; and any change made in the original order upon the rehearing does not affect the enforcement of any right arising from the original order (§ 22). As the law does not require an application for a rehearing to be made and its granting is entirely within the discretion of the Commission, we see no reason for requiring it to be made as a condition precedent to the bringing of a suit to enjoin the enforcement of the order. See, by analogy, Hollis v. Kutz, 255 U. S. 452, 454; Re Arkansas Rate Cases (C. C.), 187 Fed. 290, 306; Atlantic Coast Line v. Interstate Commission (Com. Ct.), 194 Fed. 449, 452; Baltimore Railroad v. Railroad Commission (C. C.), 196 Fed. 690, 693, PRENDERGAST v. N. Y. TEL. CO. 49 43 Opinion of the Court. 699; and Chicago Railways v. Illinois Commission (D. C.), 277 Fed. 970, 974. In Palermo Water Co. v. Railroad Commission (D. C.), 227 Fed. 708, the statute specifically provided that no cause of action should accrue in any court out of any order of the Commission unless an application for a rehearing had been made. Here the Commission did not suggest in its answer that it perceived any ground upon which it would have granted a rehearing, if an application had been made, but, on the contrary, maintained the correctness of its orders in all respects. Manifestly under such circumstances the injunction should not have been denied merely because application had not been made to the Commission for a rehearing. And for like reasons, it was not necessary that the Company should have exercised the privilege granted by one of the orders of applying to the Commission for modification of the classification. Nor did the fact that the orders of the Commission merely prescribed temporary rates to be effective until its final determination, deprive the Company of its right to relief at the hands of the court. The orders required the new reduced rates to be put into effect on a given date. They were final legislative acts as to the period during which they should remain in effect pending the final determination; and if the rates prescribed were confiscatory the Company would be deprived of a reasonable return upon its property during such period, without remedy, unless their enforcement should be enjoined. Upon a showing that such reduced rates were confiscatory the Company was entitled to have their enforcement enjoined pending the continuance and completion of the rate-making process. Cumberland Telephone Co. v. Louisiana Commission, supra. And see, by analogy, Oklahoma Natural Gas Co. v. Russell, supra; and Love n. Atchison Railway (C. C. A.), 185 Fed. 321, 326 (affirming 51826°—23------4 50 OCTOBER TERM, 1922. Opinion of the Court. 262 U. 8. 174 Fed. 59, and 177 Fed. 493). If the Commission, however, had fixed an early date for the final hearing this might have been taken into consideration by the court as an element affecting the exercise of its discretion in the matter of granting an interlocutory injunction. Cumberland Telephone Co. v. Louisiana Commission, supra, p. 217. But in the present case the Commission was still continuing indefinitely its general investigation and had not fixed any date for the final hearing. 4. The application for the injunction was heard by the District Court upon the pleadings and affidavits relating to the cost and value of the Company’s property, its revenue and expenses. It was not necessary that the Company offer in evidence the voluminous testimony that had been taken by the Commission on the legislative question prior to making the orders in question. The bill did not challenge the orders of the Commission on the ground that it had acted arbitrarily, without any evidence. See Louisville Railroad v. Garrett, 231 U. S. 299, 308. The sole issue presented was whether or not the orders were confiscatory; which was to be determined by the court upon the evidence submitted to it. Either party might, of course, show, by competent testimony, any fact brought out before the Commission which might throw light upon this issue; and the defendants cannot now rightly complain that the Company did not introduce evidence which they themselves do not appear to have regarded as material. The District Court, after consideration and analysis of the evidence, concluded that the value of the Company’s property upon which it was entitled to a return could not be reduced much below $300,000,000, and that the rates prescribed could not possibly yield a fair return upon such valuation. It is well settled that the granting of a temporary injunction, pending final hearing, is within the sound discretion of the trial court; and that, upon appeal, COMMERCIAL TRUST CO. v. MILLER. 51 43 Syllabus. an order granting such an injunction will not be disturbed unless contrary to some rule of equity, or the result of improvident exercise of judicial discretion. Meccano, Ltd. v. John Wanamaker, 253 U. S. 136, 141; Love v. Atchison Railway, supra, p. 331; and cases there cited. Especially will the granting of the temporary writ be upheld, when the balance of injury as between the parties favors its issue. Amarillo v. Southwestern Telephone Co. (C. C. A.), 253 Fed. 638, 640. Here the Commission had prescribed temporary rates which were found to be confiscatory, which were to continue in effect pending the final determination of the Commission after its investigation had been completed; and no date had been fixed for the completion of this investigation or the final hearing. The Company meanwhile could only be protected from loss by injunction; while, on the other hand, its subscribers were protected by the bond which was required for the return of the excess charges collected if the injunction should be thereafter dissolved. There was no necessity in the particular situation presented for any test period of the new rates. And finding nothing in the record which justifies us in concluding that the District Court improvidently exercised its judicial discretion in granting the interlocutory injunction, its order is Affirmed. COMMERCIAL TRUST COMPANY OF NEW JERSEY v. MILLER, AS ALIEN PROPERTY CUSTODIAN. APPEAL FROM THE CIRCUIT COURT OF APPEALS FOR THE THIRD CIRCUIT. No. 575. Argued April 13, 1923.—Decided April 23, 1923. 1. A proceeding for the seizure of enemy-held property, brought by the Alien Property Custodian as delegate of the President, under 52 ■ OCTOBER TERM, 1922. Opinion of the Court. 262U.S. the Trading with the Enemy Act, is a purely possessory one, in which the custodian’s determination that the property is so held is conclusive. P. 55. Central Trust Co. v. Garvan, 254 U. S. 554; Stoehr v. Wallace, 255 U. S. 239. 2. This is a constitutional exercise of the war power. Id. 3. Where securities and moneys were held by a trustee in trust for the joint account of a neutral and an alien enemy, to be delivered and paid to either upon his sole demand, or to the survivor, the Alien Property Custodian, proceeding under the Trading with the Enemy Act, was entitled to a decree requiring the trustee forthwith to transfer and deliver them all to him. P. 54. 4. How long this act should remain in force in view of the consequences of the War, is a legislative, not a judicial, question; it was not terminated by the cessation of hostilities, by the joint resolution declaring the state of war as between Germany and the United States at an end, or by the President’s proclamation of peace. P. 57. 281 Fed. 804, affirmed. Appeal from a judgment of the Circuit Court of Appeals affirming a judgment of the District Court which required the appellant to convey, transfer, assign, deliver, and pay to the Alien Property Custodian money and property held by it as a trustee. Mr. Selden Bacon for appellant. Mr. James A. Fowler, Special Assistant to the Attorney General, with whom Mr. Solicitor General Beck was on the brief, for appellee. Mr. Justice McKenna delivered the opinion of the Court. This is a suit under the Trading with the Enemy Act of October 6, 1917, c. 106, 40 Stat. 411, and the amendment of November 4, 1918, c. 201, 40 Stat. 1020. It was commenced by Francis P. Garvan, as Alien Property Custodian. He ceasing to be such, Thomas W. Miller was appointed his successor, and substituted as petitioner. COMMERCIAL TRUST CO. v. MILLER. 53 51 Opinion of the Court. Section 7 of the act provides that “ If the President shall so require any money or other property . . . held . . . for the benefit of an enemy ”, without license “ which the President after investigation shall determine . . . is so held, shall be conveyed, transferred, assigned, delivered, or paid over to the Alien Property Custodian.” The act has received exposition in Central Union Trust Co. v. Garvan, 254 U. S. 554, and Stoehr v. Wallace, 255 U. S. 239, and what it authorizes, and the conditions of the exercise of its authorization determined. Whatever problems the act presents those cases resolve. They decide that the President’s power may, under § 51 of the act, be delegated to and be exercised by the Custodian, and that the determination of the Custodian is conclusive whether right or wrong. And it may be exercised by forcible seizure of the property or by suit and, if by suit, the suit is purely possessory and must be yielded to; the right of any claimant being postponed to subsequent assertion. And it was decided that the Custodian acquires by suit “ nothing but the preliminary custody such as would have been gained by seizure. It attaches the property to make sure that it is forthcoming if finally condemned and does no more.” In other words, and in comprehensive description, the act may be denbminated an exercise of governmental power in the emergency of war and its procedure is accommodated to and made adequate to its purpose, but securing, as well, the assertion of opposing or countervailing rights “ by a suit in equity unembarrassed by the precedent executive determination ”, and if the claimant “ prevails ” the property “ is to be forthwith returned to him.” 1 By § 5 the President is in terms authorized to exercise “ any ” of his powers " through such officer or officers as he shall direct.” By § 6 he is authorized to appoint and “ prescribe the duties of ” the officer to be known as the Alien Property Custodian. 54 OCTOBER TERM, 1922. Opinion of the Court. 262U.S. These are the determining generalities, and the Circuit Court of Appeals, applying them, affirmed the decree of the District Court, adjudging, ordering and decreeing that the Commercial Trust Company of New Jersey “ do forthwith convey, transfer, assign, deliver and pay to Thomas W. Miller, as Alien Property Custodian, all of the money and other property held by it under a certain trust agreement entered into on January 30, 1913 ”, between the Company and Frederick Wesche and Helene J. v. Schierholz. A list of the moneys and other property was attached to the decree. It was recited in the trust agreement that the property, which consisted of bonds, was held “ for the joint account of said Frederick Wesche and Helene J. v. Schierholz, and to collect the interest to become due and payable on said bonds ” for their joint account, and to deliver the bonds from time to time as requested, to either “ or to the survivor of them, it being understood that the said bonds and the said interest money to be collected thereon are to be held and collected and delivered or paid over to either the said Frederick Wesche or to the said Helene J. v. Schierholz, or to the survivor of them.” In addition to the above, the following may be quoted from the opinion of the Circuit Court of Appeals: “ The Trust Company, in compliance with the provisions of the act, made a report in December, 1917, that it held stocks, bonds, and mortgages, securities and money, of the value of about $600,000, in trust, as to both principal and interest, for the joint account of Frederick Wesche, of Paris, France, and Helene J. von Schierholz, of Plaue, Germany, to be delivered and paid to either upon his or her sole demand, or to the survivor. “ Upon investigation the Alien Property Custodian determined that Wesche was a neutral and von Schierholz an alien enemy not holding a license from the President, and demanded surrender of the securities. Because the COMMERCIAL TRUST CO. v. MILLER. 55 51 Opinion of the Court. neutral had power upon his sole order to withdraw the whole property, the Trust Company thought the Alien Property Custodian had no right to it and accordingly declined to yield possession. Because the alien enemy had like power upon her sole order to withdraw the whole property and acquire its possession, the Alien Property Custodian thought he had a right to it and accordingly demanded it. The question is, which was right?” The court answered, the Custodian by virtue of his power under the act and the efficacy of its exercise. This appeal disputes the answer, and the contention is that the power was not exercised as required because the Custodian had not made an investigation which justified in any way “ any determination that [the property] was all [italics counsel’s] enemy property, or seizure of dll [italics counsel’s] the property as such.” In support of the contention, it is urged, that no investigation was made of any interest in the property other than that of Mrs. Schier-holz—none of Wesche, or none determined beyond what was shown by the report of and letter of the Commercial Trust Company. And there is also a contention that Wesche was not an enemy, and that he was given no opportunity of review, and the act, as to him, was“ unconstitutional and without due process of law ” and that, consequently, surrender of the property by appellant (Trust Company) under such circumstances to the Custodian, would have afforded it no defense to the claim of Wesche for such part of the property as belonged to him. The appellant accordingly did not transfer or deliver the property as so demanded, and still retains it under supersedeas bond. The contentions are precluded by the cases which we have cited. As there decided, the act was of peremptory quality and effect. The suit was tantamount to physical seizure—gave preliminary custody such as seizure gives, and was intended to be not “ less immediately effective than a taking with the strong hand.” 56 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. It is manifest, therefore, that the defenses upon which the contentions are based were not available to either claimant of the property. And besides, under the act, it is to be remembered, the Custodian succeeds to all the rights in the property to which the enemy is entitled as completely as if by conveyance, transfer or assignment, and the Trust Company in the present case held the bonds for the joint account of Wesche and Mrs. Schierholz to be paid over to either of them. She had the power, therefore, to demand the bonds and receive them and to this power the Custodian determined he succeeded, and, therefore, exercised it. What interest Wesche had or has does not require decision, nor can the Trust Company urge it, the act requiring submission to the determination of the Custodian. The case, therefore, has no complexity and we do not think it is necessary to trace through the elaborate argument of counsel by which he attempts to sustain the contention of the Trust Company. Its foundation is, as said by the Circuit Court of Appeals, that the Trust Company “ claims the right to have property interests judicially determined by a court of equity before a right to the possession of the property can be asserted by the Alien Property Custodian.” The claim is precluded, we have seen, by Central Union Trust Co. v. Garvan, and Stoehr v. Wallace, supra. Those cases decide, as we have also seen, that the suit is of as peremptory character as “ seizure in pais ” and is the dictate and provision for the emergency of war, not to be defeated or delayed by defenses, its only condition, therefore, being the determination by the Alien Property Custodian that it was enemy property. It was recognized that there is implication in the act that mistakes may be made, but the act assumes “ that the transfer will take place whether right or wrong.” In other words, it is the view of the opinions that the act provides for an exercise of government, but also provides, as COMMERCIAL TRUST CO. v. MILLER. 57 51 Opinion of the Court. we have said, redress for mistakes in its exercise by the claimant of the property filing a claim under § 9, which, if not yielded to, may be enforced by suit. The next contention of the Trust Company is that the act being a provision for the emergency of war, it ceased with the cessation of war, ceased with the joint resolution of Congress declaring the state of war between Germany and the United States at an end, and its approval by the President, July 2, 1921, and the Proclamation of Peace by the President August 25, 1921. The contention, however, encounters in opposition the view that the power which declared the necessity is the power to declare its cessation, and what the cessation requires. The power is legislative. A court cannot estimate the effects of a great war and pronounce their termination at a particular moment of time, and that its consequences are so far swallowed up that legislation addressed to its emergency had ceased to have purpose or operation with the cessation of the conflicts in the field. Many problems would yet remain for consideration and solution, and such was the judgment of Congress, for it reserved from its legislation the Trading with the Enemy Act and amendments thereto, and provided that all property subject to that act shall be retained by the United States “ until such time as the Imperial German Government . . . shall have . . . made suitable provision for the satisfaction of all claims.” See Kahn v. Anderson, 255 U. S. 1, and Vincenti n. United States (C. C. A., 272 Fed. 114, and 256 U. S. 700). Affirmed. 58 OCTOBER TERM, 1922. Opinion of the Court. 262U.S. UNITED STATES TRUST COMPANY OF NEW YORK, ANCILLARY ADMINISTRATOR OF WESCHE, v. MILLER, AS ALIEN PROPERTY CUSTODIAN. APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE DISTRICT OF NEW JERSEY. No. 292. Argued April 13, 1923.—Decided April 23, 1923. Decided upon the authority of Commercial Trust Co. v. Miller, ante, 51. Affirmed. . Appeal from an order of the District Court denying a petition for leave to intervene in the case above cited. Mr. Selden Bacon for appellant. Mr. James A. Fowler, Special Assistant to the Attorney General, with whom Mr. Solicitor General Beck was on the brief, for appellee. Mr. Justice McKenna delivered the opinion of the Court. This case was argued and submitted with No. 575, Commercial Trust Co. v. Miller, just decided, ante, 51. It is a petition for leave to intervene in the latter suit instituted (as we have seen) by Francis P. Garvan, then Alien Property Custodian, Miller subsequently succeeding him. That suit is here on appeal from the United States Circuit Court of Appeals for the Third Circuit, this suit is here on appeal from the District Court of the United States for the District of New Jersey, a constitutional question being, it is contended, involved. “ The District Court,” the assertion-is, “months after peace had been declared, denied Wesche’s petition to intervene, U. S. TRUST CO. v. MILLER. 59' 58 Opinion of the Court. and awarded conveyance and delivery of what was admittedly his separate property, to the Custodian.” In support of these contentions and their pertinency and control, counsel’s comment is that the Custodian made two demands for the property, but “ that these demands were both made while the act forbade recourse by any claimant to any court to review any seizure thereunder by the Custodian, save the United States District Court for the district in which the claimant resided. The amendment permitting suit in the Supreme Court for the District of Columbia was added only by the Act of July 11th, 1919. And Wesche, a neutral, separate owner of part of the property, and custodian of it all, resided in Switzerland, and Ahrenfeldt, an American citizen, separate owner of part of the property, was residing throughout the war in England, France or Switzerland.” And the further argument is that “ seizure under such circumstances was unconstitutional ” and that “ mere demands ” by the Custodian “ did not constitute constructive capture, and even constructive capture was not completed before peace came.” This statement is enough preliminarily to the understanding and appreciation of Wesche’s fundamental contentions which are that the conditions of the act were not complied with before suit and suit, therefore, was not justified. And the unconstitutionality of the act as applied to his case is also urged, and that the defenses were available to him in the suit. The court therefore, is the contention, in denying his petition to intervene, com-, mitted error. The case, it will be observed, is identical in legal aspects with Commercial Trust Co. v. Miller. Here, as there, Wesche’s interest is asserted in the property, here by himself, there by the Trust Company. Here, as there, the conditions of suit were asserted not to have been performed; here, perhaps with more emphasis, as there, the 60 OCTOBER TERM, 1922. Opinion of the Court. 262U.S. unconstitutionality of the act is argued; here, as there, it is urged that these contentions constituted defenses that could be made in the suit, and that relief was not only through the “ filing of a claim and instituting proceedings as provided by Section 9 of the Trading with the Enemy Act.” We repeat, therefore, the cases are identical and upon the authority of that case, the order of the District Court denying Wesche’s petition for intervention is Affirmed. AHRENFELDT v. MILLER, AS ALIEN PROPERTY CUSTODIAN. APPEAL FROM THE CIRCUIT. COURT OF APPEALS FOR THE THIRD CIRCUIT. No. 576. Argued April 13, 1923.—Decided April 23, 1923. Decided upon the authority of Commercial Trust Co. v. Miller, ante, 51. 282 Fed. 944, affirmed. Appeal from a judgment of the Circuit Court of Appeals which affirmed an order of the District Court denying the appellant’s petition for leave to intervene in the case above cited. Mr. Selden Bacon for appellant. Mr. James A. Fowler, Special Assistant to the Attorney General, with whom Mr. Solicitor General Beck was on the brief, for appellee. Mr. Justice McKenna delivered the opinion of the Court. Ahrenfeldt, the appellant, filed a petition in the District Court in the case of Garvan v. Commercial Trust Co., (in this Court, Commercial Trust Co. v. Miller, No. 575, ante, 51) for leave to intervene, alleging that AHRENFELDT v. MILLER. 61 60 Opinion of the Court. he was an American citizen residing abroad since January 1st, 1914, in France, England and Switzerland, having no residence in any judicial district of the United States during that time. He further alleged that he was the admitted separate owner of an identified portion of the securities and cash deposited with the Commercial Trust Company as mentioned in cases Nos. 575 and 292, ante, 51, 58, and that his “ petition for leave to intervene related solely to his own separate property.” The District Court denied his petition and its order was affirmed by the Circuit Court of Appeals. The grounds of affirmance, the Court, through Circuit Judge Woolley, expressed as follows: “ At the hearing in Commercial Trust Company of New Jersey v. Thomas W. Miller, as Alien Property Custodian, 275 Fed. 841, the appellant, Charles J. Ahrenfeldt, presented a petition for leave to intervene and have determined by the District Court his claim to ownership of a part of the property in process of seizure. The District Court denied the petition, holding that the question sought to be litigated by Ahrenfeldt can be raised only after the demand of the Alien Property Custodian has been complied with, and then only by proceedings authorized by Section 9 of the Act, as amended June 5, 1920. That the District Court was right is established by the decisions of the Supreme Court in Central Union Trust Co. v. Garvan, 254 U. S. 554, and Stoehr v. Wallace, 255 U. S. 239. “The order is affirmed.” It is manifest that the case is identical in legal principle, and to a certain and material extent in ccfntentions, with cases Nos. 575 and 292, and is necessarily involved in their ruling. The decree of the Circuit Court of Appeals affirming the decree of the District Court is Affirmed. 62 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. UNITED STATES v. LUSKEY. APPEAL FROM THE COURT OF CLAIMS. No. 371. Argued April 10, 1923.—Decided April 16, 1923. The additional pay provided by the Act of March 3, 1915, c. 83, 38 Stat. 928, for enlisted men in the Navy and Marine Corps “ while lawfully detailed for duty involving actual flying in air craft,” goes to the person so detailed irrespective of the number of flights made by him. P. 64. 56 Ct. Clms. 411, affirmed. Appeal from a judgment of the Court of Claims awarding a sum as extra pay to a machinist’s mate in the Navy. Mr. James A. Fowler, Special Assistant to the Attorney General, with whom Mr. Solicitor General Beck was on the brief, for the United States. Mr. George A. King, with whom Mr. William B. King and Mr. George R. Shields were on the brief, for appellee. Mr. Justice McKenna delivered the opinion of the Court. The findings of fact of the Court of Claims are in substance, these: (1) Luskey was a machinist’s mate in the Navy. He was by proper authority detailed for duty involving actual flying in aircraft, September 15, 1915, and continued in that duty until after February 1, 1917. He made actual flights, one of which was in September, 1916, and two others in December, 1916, and was at all times capable of flying if so ordered. (2) He received the sum of $329.00, being 50% additional pay allowed him by the Act of March 3, 1915, c. 83, 38 Stat. 928, for duty involving actual flying for the entire period from July 1, 1916, to January 31, 1917, a period of seven months. At a later period the amount was deducted from his pay. He was paid a certain amount for the month of December, 1916. UNITED STATES v. LUSKEY. 63 62 Opinion of the Court. If entitled to additional pay for aviation duty for the entire period, July 1, 1916, to January 31, 1917, less pay received for December, 1916, he would receive $279.95. Upon the facts found, the court concluded 11 as matter of law ” that he was entitled to recover, and “ adjudged and ordered that ’’ he “ recover of and from the United States the sum of two hundred and seventy-nine dollars and ninety-five cents ($279.95).” The United States, by this appeal, disputes the conclusion and judgment. Its contention is that “ to entitle an officer designated to such service to the extra compensation ” he must “ be actually engaged in flying, and that, when an unreasonable time elapses during which he makes no actual flight, he is not entitled to extra pay for such period.” Expressing its contention in other words, it, in effect, is that it is not the detail but the flying, not the possibility of a risk but the actual risk, that vests the right to the additional pay. To sustain the contention, emphasis is put upon, and insistence made of, the words of the act (38 Stat. 939) that compensation is awarded to the officer “ while lawfully detailed for duty involving actual flying in air craft.” To the contention, and rejecting it, the court replied, after quoting the statute:1 “The word ‘ involving,’ used in the statute may be inept, but its meaning in the connection in which it is used is plain and not to be mistaken, and that is, that the pay is not made dependent upon the number of flights while on such duty, but is made dependent on the detail to such duty. When, therefore, the plaintiff was lawfully detailed to duty involving flying in 1 “ Hereafter enlisted men of the Navy or Marine Corps, while detailed for duty involving actual flying in ais craft, shall receive the pay, and the permanent additions thereto, including allowances, of their rating and service or rank and service, as the case may be, plus fifty per centum increase thereof.” 64 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. aircraft he must be regarded and treated as entitled to the consequences of such detail and to the pay provided for such duty.” We concur in the conclusion and judgment. The meaning of the statute “ is plain.” If Congress had intended to provide a detail to intermittent duty with intermittent pay, Congress would have specifically so provided, not left repulsion to it the advantage of ambiguity. If it intended to regard “ the possibility of a risk or the actual risk ” in flying as determination of compensation or as a factor in compensation, as the United States urges, care would have been taken, not, we will say, against its abuse, but against its use putting the officer’s life in peril many times a day. If that were reasonable in expectation, the other contention is condemned, that is, that the officer is entitled to compensation only when he engages in flights and for reasonable intervals between them. The contention gives no animation to prepare for the duty and its hazards. Congress naturally supposed that there would be no detail to aircraft duty unless there was requirement or use for it, and when either ceased, the detail would be revoked, but if made and not revoked, its duration constituted a service for which the officer must keep prepared and to which, therefore, the compensation was by the statute assigned. Judgment affirmed. UNITED STATES v. MOSSEL. 65 Opinion of the Court. UNITED STATES v. MOSSEL. UNITED STATES v. MILFORD. APPEALS FROM THE COURT OF CLAIMS., Nos. 372, 373. Submitted April 10, 1923.—Decided April 23, 1923. Decided, pursuant to stipulation, in accordance with United States v. Luskey, ante, 62. 56 Ct. Clms. 502, affirmed. Mr. James A. Fowler, Special Assistant to the Attorney-General, with whom Mr. Solicitor General Beck was on the brief, for the United Staites. Mr. George A. King, with whom Mr. William B. King and Mr. George R. Shields were on the brief, for appellees. Mr. Justice McKenna delivered the judgment of the Court. Under stipulation of counsel, filed in the Clerk’s Office, the above cases are submitted on the record as printed in United States v. Luskey, No. 371, just decided, ante, 62, “ it being agreed by counsel that they shall be controlled by the decision in thatxcase.” Therefore, upon its authority, the judgments in these cases are Affirmed. 51826°—23——5 66 OCTOBER TERM, 1922. Argument for Defendant in Error. 262U.S. A. G. SPALDING & BROS. v. EDWARDS, COLLECTOR OF INTERNAL REVENUE FOR THE SECOND DISTRICT OF NEW YORK. ERROR TO THE DISTRICT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK. No. 710. Argued April 10, 11, 1923.—Decided April 23, 1923. 1. A sale of goods made in this country to a commission merchant for a foreign consignee, for the sole purpose of export, and consummated only when the goods, addressed to the foreign consignee, are delivered by the vendor to the exporting carrier, is a step in their exportation and, under Const., Art. I, § 9, cannot be taxed by the United States, even though the law under which the tax is imposed is a general one, not aimed specially at exports. P. 67. 2. Goods were started jn exportation when so delivered to the carrier, notwithstanding the fact that the bill of lading was not issued until later, and, notwithstanding the possibility that the commission merchant, holding the title, might change his mind and divert them from their foreign destination. P. 69. 285 Fed. 784, reversed. Error to a judgment of the District Court dismissing the complaint in an action to recover money exacted by the Government as a tax on a sale of goods. Mr. Frank Davis, Jr., with whom Mr. Franklin Grady was on the briefs, for plaintiff in error. Mr. Solicitor General Beck, with whom Mr. P. C. Alexander was on the brief, for defendant in error. From the history of the Export Clause in the Constitution, it will appear that the framers had in mind a tax levied directly and deliberately upon the act of exportation. They were not considering the application of general taxing laws, which might fall in individual cases upon merchandise, which might thereafter be exported. The tax levied by § 600 of the Revenue Act of 1917 is an excise levied upon the business of selling the particular SPALDING & BROS. v. EDWARDS. 67 66 Opinion of the Court. articles named in the statute and is measured by the price for which the article is sold. Crew Levick Co. v. Pennsylvania, 245 U. S. 292; Heisler v. Thomas Colliery Co., 260 U. S. 245. The constitutional provision has been often interpreted by the courts. The most recent cases clearly negative the plaintiff’s contention. Cornell v. Coyne, 192 U. S. 418; Turpin v. Burgess, 117 U. S. 504; Coe n. Errol, 116 U. S. 517; Southern Pacific Co. v. Arizona, 249 U. S. 472; Peck & Co. v. Lowe, 247 U. S. 165; Pace v. Burgess, 92 U. S. 372; American Mfg. Co. v. St. Louis, 250 U. S. 459. The cases which held taxes unconstitutional all clearly disclosed direct burdens upon some process or instrumentality of exportation. Brown v. Maryland, 12 Wheat. 419; Almy v. California, 24 How. 169; Fairbank v. United States, 181 U. S. 283; United States v. Hvoslef, 237 U. S. 1; Thames & Mersey Ins. Co. v. United States, 237 U. S. 19. Mr. Justice Holmes delivered the opinion of the Court. This is a suit to recover the amount of taxes collected by duress under color of the War Revenue Act of October 3, 1917, c. 63, § 600 (f), 40 Stat. 300, 316. The plaintiff, a corporation, manufacturer of the goods in question, says that the tax was laid on articles exported from, a State, (New York,) in violation of Article I, § 9, of the Constitution of the United States. Upon demurrer the complaint was dismissed by the District Court on the merits. The tax is “ upon all . . . baseball bats, . . . balls of all kinds . ... sold by the manufacturer, producer, or importer ” and was levied on three occasions admitted to be similar, so that the statement of one transaction will be enough. Delgado & Cia, a firm in the city of La Guaira, Venezuela, ordered Scholtz & Co., commission 68 OCTOBER TERM, 1922. Opinion of the Court. 262U.S. merchants in New York, to buy for their account and risk a certain number of baseballs and baseball bats, &c., D & C at an agreed price and to mark the packages #36 to indicate the purchasers and their place. Scholtz & Co. thereupon sent to the plaintiff in writing, dated December 10, 1918, this: “ Export order from Scholtz & Co., Shipping and Commission Merchants . . . Please ship on or before the............per steamer....... ...... Rush. . . . Errors in weight often entail heavy fines in Foreign Customs Houses, therefore be careful when weighing and marking Goods, as we shall hold you responsible for any fines caused through your errors. Cases or crates must be made to fit Goods as duty is paid by Gross weight. Shipping mark and number to be put on packages. [As above, with statement of the goods wanted.] Please send Memo. Invoice at once so we can apply for license and clear at Custom House.” Scholtz & Co. instructed the plaintiff to deliver the packages so marked to the Atlantic & Caribbean Steam Navigation Co., an exporting carrier in New York. The plaintiff marked and delivered the goods as directed and was given a receipt by the carrier which it sent to Scholtz & Co. and which was exchanged by them for an export bill of lading in their name, dated February 10, 1919. The goods were transported and delivered in due time to Delgado & Cia. Scholtz & Co. paid the plaintiff on February 1 and were paid their commission by Delgado & Cia. in ninety days from date of shipment. The transaction from start to finish was understood and intended by the plaintiff and Scholtz & Co. to be for the purpose of exporting the goods to Delgado & Cia. in Venezuela. The question is whether the sale was a step in exportation, assuming as appears to be the fact, that the title SPALDING & BROS, v: EDWARDS. 69 66 Opinion of the Court. passed at the moment when the goods were delivered into the carrier’s hands. The fact that the law under which the tax was imposed was a general law touching all sales of the class, and not aimed specially at exports, would not help the defendant if in this case the tax was “ laid on articles exported from any State”, because that is forbidden in terms by the Constitution. Article I, § 9. United States v. Hvoslef, 237 U. S. 1, 18. Crew Levick Co. v. Pennsylvania, 245 U. S. 292. Articles in course of transportation cannot be taxed. William E. Peck de Co. v. Lowe, 247 U. S. 165,173. So we return to the question that we have stated. To answer it with regard to any transaction we have to fix a point at which, in view of the purpose of the Constitution, the export must be said to begin. As elsewhere in the law there will be other points very near to it on the other side, so that if the necessity of fixing one definitely is not remembered any determination may seem arbitrary. In this case, for instance, while the goods were in process of manufacture they were none the less subject to taxation if they were intended for export and made with specific reference to foreign wants. Cornell v. Coyne, 192 U. S. 418. Heisler v. Thomas Colliery Co., 260 U. S. 245. On the other hand no one would doubt that they were exempt after they had been loaded upon the vessel for Venezuela and the bill of lading issued. It seems to us that the facts recited are closer to the latter than to the former side, and that the export had begun. The very act that passed the title and that would have incurred the tax had the transaction been domestic, committed the goods to the carrier that was to take them across the sea, for the purpose of export and with the direction to the foreign port upon the goods. The expected and accomplished effect of the act was to start them for that port. The fact that further acts were to be done before the goods would get to sea does not matter 70 OCTOBER TERM,' 1922. Syllabus. 262 U. S. so long as they were only the regular steps to the contemplated result. Getting the bill of lading stands no differently from putting the goods on board ship. Neither does it matter that the title was in Scholtz & Co. and that theoretically they might change their mind and retain the bats and balls for their own use. There was not the slightest probability of any such change and it did not occur. The purchase by Scholtz & Co. was solely for the purpose of Delgado & Cia. and for their account and risk. Theoretical possibilities may be left out of account. In Railroad Commission of Louisiana v. Texas & Pacific Ry. Co., 229 U. S. 336, the consignees might have retained the goods at New Orleans instead of shipping them abroad. The fact that they came to New Orleans by rail from another place in the State made no difference. The same principle was applied in Texas & New Orleans R. R. Co. v. Sabine Tram Co., 227 U. S. Ill, 123. The overt act of delivering the goods to the carrier marks the point of distinction between this case and Cornell v. Coyne, 192 U. S. 418. To put it at any later point would fail to give to exports the liberal protection that hitherto they have received; of which an example may be seen in Thames & Mersey Marine Ins. Co. v. United States, 237 U. S. 19. Judgment reversed. ST. LOUIS SOUTHWESTERN RAILWAY COMPANY v. UNITED STATES. APPEAL FROM THE COURT OF CLAIMS. No. 184. Argued March 6, 7, 1923.—Decided April 23, 1923. 1. Under the Act of March 4, 1913, c. 143, 37 Stat. 797, authorizing the Postmaster General to pay additional compensation, not exceeding five per cent., for transportation of mail on railroads on and after July 1, 1913, for the remainder of the contract terms, ST. LOUIS S. W. RY. v. U. S. 71 70 Opinion of the Court. on account of increased weight of mails resulting from the parcels post law, the decision of the Postmaster General upon the amount of compensation to be allowed within the limit fixed was conclusive; and a railroad company, which accepted payment, under protest, of amounts so fixed, cannot claim more from the Government upon the ground that they were inadequate. P. 73. 2. Transportation of additional mail matter, resulting from the parcel post, even if not requirable under contracts existing when the parcel post system was adopted, did not give the transporting company a right to additional compensation, when it was done voluntarily during a period (January 1, 1913, to June 30, 1913) for .which Congress has failed to allow such compensation. Act of March 4, 1913, supra. P. 73. 56 Ct. Clms. 64, affirmed. Appeal from a judgment of the Court of Claims dismissing the petition upon demurrer. Mr. Benjamin Carter for appellant. Mr. Blackburn Esterline, Assistant to the Solicitor General, with whom Mr. W. Marvin Smith was on the brief, for the United States. Mr. Justice Brandeis delivered the opinion of the Court. Prior to July 1, 1910, claimant entered into a contract with the Post Office Department to carry the mails over a part of its line for the period of four years from that date. Prior to July 1,1911, it entered into a like contract to carry the mails over another part of its lines. These contracts were in form and substance similar to that involved in New York, New Haven & Hartford R. R. Co. v. United States, 258 U. S. 32, and other recent cases.1 By them the amount of compensation was fixed by a weighing prior to the date of the contract. While the mails 1 United States v. Atchison, Topeka & Santa Fe Ry. Co., 249 U. S. 451; New York, New Haven Hartford R. R. Co. v. United States, 251 U. S. 123; The Mail Divisor Cases, 251 U. S. 326. 72 OCTOBER TERM, 1922. Opinion of the Court. 262U.S. were being carried by claimant under these contracts, the parcel post system was established pursuant to the Act of August 24, 1912, c. 389, § 8, 37 Stat. 539, 557-559. From the inauguration of the service, on January 1, 1913, to the end of the contract periods, claimant carried the parcel post together with the other mail. For rendering this service, during the first six months, no additional compensation has been paid claimant. For rendering it during the remainder of the contract periods, claimant received, under later legislation, sums in addition to the compensation provided by the contracts. These sums it deems inadequate. On February 1, 1919, this suit was brought to recover, as reasonable compensation for the service rendered, the several amounts which it insists should have been paid. The Government demurred to the petition. The Court of Claims dismissed it on the ground that there was neither a contract express or implied in fact, nor a law of Congress to support the claims for additional compensation. The case is here on appeal. The Act of August 24, 1912, provided that the establishment of parcel post zones and postage rates should go into effect January 1, 1913. It increased the weight of fourth class mail matter from four to eleven pounds and the size to seventy-two inches in length and girth. It also authorized further increases of the weight limit, by order of the Postmaster General with the consent of the Interstate Commerce Commission. But that act, while it authorized the Postmaster General to “ readjust the compensation of star route and screen wagon contractors if it should appear that as a result of the parcel post system the weight of the mails handled by them has been materially increased,” made no provision whatsoever for increasing the pay of railroads because of carrying parcel post matter. Act of March 4, 1913, c. 143, 37 Stat. 791, 797, authorized the Postmaster General “'to add to the compensation paid for transportation on railroad routes ST. LOUIS S. W. RY. v. U. S. 73 70 Opinion of the Court. on and after July 1,1913, for the remainder of the contract terms” not exceeding five per cent, thereof per annum 11 on account of the increased weight of mails resulting from the enactment of ” the parcel post provision of the preceding year. The Postmaster General allowed claimant, under this act on some routes the full five per cent.; on some less; on some nothing additional. But the latter act, also, contained no provision authorizing additional pay to the railroads for carrying parcel post matter from January 1, 1913, to June 30, 1913. First. That no recovery can be had for the period after June 30, 1913, is clear. Before that date Congress had made express provision for the additional compensation and in so doing had limited the amount payable. The power to grant or to withhold was, within the limit set, vested in the Postmaster General; and his decision as to additional compensation was conclusive except upon Congress.2 The protest alleged to have been made in August, 1913, against the amounts proposed to be paid for this period, cannot avail claimant, New York, New Haven & Hartford R. R. Co. v. United States, 251 U. S. 123. Second. The first six months’ period presents a different situation; but the legal result is the same. There is no claim of an express contract to pay additional compensation; nor is there any basis for a claim on a contract implied in fact. The petitioner alleges that the parcel post matter was radically different in character 2 Some further compensation was in fact made after the expiration of the contracts, under later legislation. By Act of July 28, 1916, c. 261, 39 Stat. 412, 425 (passed after both contracts with claimant had expired), the Postmaster General w.as authorized to make an additional payment not exceeding one-half of one percentum per annum on account of the increased weight of mails resulting from his order effective August 15, 1913, raising the weight limit to twenty pounds and additional payment not exceeding one per cent, on account of the increased weight resulting from his order effective January 1, 1914, raising the weight limit to fifty pounds. 74 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. from the ordinary mails as constituted before January 1, 1913. It may be, that claimant might legally have refused, for this reason, to carry the parcel post mail under then existing contracts; even if additional compensation had been offered. Compare United States v. Utah, Nevada & California Stage Co., 199 U. S. 414; Hunt y. United States, 257 U. S. 125. But the petition contains no allegation' that it refused to perform this extra service, unless the Government would agree to pay additional compensation. The petition contains allegations apparently designed to show that objection to carrying the parcel post matter would have been largely futile;3 but the allegations fall far short of showing a demand that the parcel post matter be eliminated, or a protest against carrying it under the conditions then existing. If the parcel post act, or other legislation, gives a right to compensation, the refusal or failure of the Postmaster General to allow the claim could not, of course, defeat recovery. Compare Campbell n. United States, 107 U. S. 407, 411; 3 The petition alleges: “ Much the larger part of the mails on petitioner’s routes and on the routes of the other important railroad companies were carried in post office cars, for which cars arrangements were made between the Post Office Department and the railroad companies independent of the contracts for mail transportation, and, under such arrangements, such cars were in operation on peti-■ tioner’s said routes at the time when the parcel post was established and at the times when the increases in weight of the parcel-post matter became effective. The greater part of the mails, carried in such cars were loaded into and out of the same by contractors or other persons employed by the Post Office Department, over whom petitioner and the other railroad companies had no control, and the Postal Laws and Regulations (sec. 1583) forbade that railroad employees should enter the post office cars when in motion for any other purpose than the operation of the trains. Moreover, the parcel-post matter was so confused with the other mails that the employees of petitioner and the other railroad companies could not possibly have distinguished them, and removed them from the post office cars, if otherwise they had had opportunity.” ST. LOUIS S. W. RY. v. U. S. 75 70 Opinion of the Court. United States v. Knox, 128 U. S. 230. But, unless there is such legislation, claimant cannot recover without showing a contract, express or implied in fact to pay the extra compensation. Compare United States n. North American Transportation & Trading Co., 253 U. S. 330, 335; Sutton v. United States, 256 U. S. 575, 581. No basis for such a contract is afforded by the further allegation that when the Act of 1912 was passed, and when the parcel post system was established, railroads, high officials of the Post Office Department, and members of both houses of Congress, in charge of postal legislation, understood that Congress would provide additional compensation to the railroads. The legislation makes no provision for additional compensation to the railroads for the period prior to July 1, 1913; and its history makes clear that Congress concluded not to allow any. For some time prior to the passage of the Act of August 24, 1912, there had been much discussion in Congress concerning the pay of railroads for carrying the mail. The carriers urged generally that the pay was inadequate ,* and there were proposals for increase .of compensation. On the part of the public, there was a widespread belief that the railroads were overpaid; and there were proposals to reduce the compensation. When Congress passed the 1912 Act, it was not prepared to decide this controverted question. It, therefore, appointed a special committee to enquire into the subject, and also others, relating to parcel post, and directed the committee to report at the earliest date possible. Meanwhile, the discussion continued in Congress. That the parcel post would result in largely increased weight of mail was repeatedly asserted; but it was insisted that the pay under existing contracts would give the railroads even more compensation than they deserved. The fact was recognized that the appropriation bill enacted March 4, 1913, provided increased pay only for parcel post service ren- 76 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. dered after June 30, 1913.4 The failure of Congress to make any provision for the preceding six months was not inadvertent. It was the deliberate purpose of Congress not to give the railroads additional pay for carrying the parcel post mail during that period.6 The case at bar is wholly unlike Freund v. United States, 260 U. S. 60; United States v. Utah, Nevada & California Stage Co., 199 U. S. 414, and Hunt v. United States, 257 U. S. 125, on which claimant relies. In each of those cases there was ample power in the Postmaster General to pay the additional compensation claimed. In each the main question presented was whether under the proper construction of the contract claimant was entitled to additional pay. Moreover, in each, the contractor had by proper protest preserved his rights; and there was perhaps an element of duress. Here, as in Sutton v. United States, 256 U. S. 575, the Department had been denied power to pay an additional sum; there 4 See Vol. 49, Cong. Rec., Part 5, 62nd Cong., 3rd sess., pp. 4459, 4461, 4684, 4686-4689, 4690, 4692, 4767, 4769, and particularly p. 4768: “ Mr. Moon of Tennessee (Manager on part of the House, submitting Conference Report). No; we do not add anything until after July, 1913. “ Mr. Murdock. That is my question—do we add 5 per cent after July, 1913? “Mr. Moon. Yes; weighed before January 1.” 8 See Senate Report, Committee on Post Offices and Post Roads, July 23, 1912, No. 955, p. 25, 62nd Cong., 2nd sess.; Conference Report, August 23, 1912, H. R. No. 1242, 62nd Cong., 2nd sess.; Message of President, December 19, 1912, Sen. Doc. 989, p. 6, 62nd Cong., 3rd sess.; Senate Report, February 11 (17), 1913, No. 1212, pp. 2, 4, 62nd Cong., 3rd sess.; also Vol. 49, Cong. Rec., Part 2, 62nd Cong., 3rd sess., pp. 1409, 1411, 1412, 1466, 1476, 1506, 1509, 1511; Vol. 49, Cong. Rec., Part 4, 62nd Cong., 3rd sess., pp. 4012, 4013, 4014; Vol. 48, Cong. Rec., 62nd Cong., 2nd sess., Part 5, pp. 4675, 4989, 5068, 5075, 5227; Vol. 48, Cong. Rec., 62nd Cong., 2nd sess.. Part 6, pp. 5439, 5473, 5504, 5649. MON BONDING CO. v. KARATZ. 77 70 Syllabus. was no protest by the contractor against assuming the additional service ; and there was no duress. The service was undertaken voluntarily; no doubt, in the expectation that Congress would provide additional compensation. It made some provision; but concluded not to make any for the first six months. We may not enquire into the reasons for this refusal, or undertake to revise its judgment. The obstacle to recovery is not strictly lack of jurisdiction in the Court of Claims. There was an express contract between the parties; there was also legislation; and on these the claim is founded. The obstacle to recovery is lack of legal merits. The Government did not in fact promise to pay for the extra service; nor did the legislation give to claimant a right to compensation. In other words, the petition fails to set out a cause of action. Affirmed. MON BONDING & SURETY COMPANY v. KARATZ. DEPARTMENT OF TRADE & COMMERCE OF THE STATE OF NEBRASKA ET AL. v. HERTZ ET AL., AS RECEIVERS OF LION BONDING & SURETY COMPANY. CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE EIGHTH CIRCUIT. Nos. 574, 467. Argued March 2, 1923.—Decided April 23, 1923. 1. Insolvency of a corporation is not an equitable ground for appointing a receiver at the suit of a simple contract creditor. P. 85. Pusey & Jones Co. v. Hanssen, 261 U. S. 491. 2. In a suit by a creditor alleged to be on behalf also of others similarly situated, seeking to collect a debt from an insolvent cor- -poration through a receivership and by having the debt declared a hen on its assets, the amount in controversy, determining the jurisdiction of the District Court, does not depend on the corpo- 78 OCTOBER TERM, 1922. Statement of the Case. 262U.S. ration’s assets or liabilities, but is the amount of the plaintiff’s claim as shown by the bill. P. 85. 3. Where the bill discloses that the amount in controversy is less than the jurisdictional amount, a general allegation to the contrary is of no avail. Id. 4. A suit in the District Court which is dependent on a receivership in the District Court of another district fails with the dismissal of the bill in that case. P. 87. 5. The provision of Jud. Code, § 56, extending the operation of a receivership to other districts in the same judicial circuit, applies where there is fixed property extending, as a unit, into different States, like railroads or pipe lines; but not where the assets are those of an insurance company, described as cash, mortgages, securities, bills receivable, real estate, stocks and bonds. P. 87. 6. The general rule is that a receiver cannot sue in a foreign jurisdiction, and this is not overcome by an order of the court appointing him purporting to embrace in the receivership all property of the defendant wherever situate and authorizing the receiver to apply to other courts in aid of the order. P. 87. 7. Where a state court of competent jurisdiction has, by appropriate proceedings, taken property into its possession through its officers, the property is thereby withdrawn from the jurisdiction of all other courts. P. 88. 8. Where a state court of Nebraska, under Comp. Stats. Neb. 1922, §§ 7745-7748, first took possession of records and assets of a local insurance company, through the State Department of Trade and Commerce, for the purpose of conducting the busmess temporarily, and later, by a supplemental decree made on a supplementary application, ordered the Department to liquidate it, held that receivers appointed by a federal court in the interim were not entitled to possession of the res, and that their suit in a federal court against the company and the Department for the purpose of acquiring possession could not be maintained, and that the legality of the state court’s action in continuing its control could not be thus questioned or attacked collaterally. P. 89. 281 Fed. 1021; 280 Fed. 540, reversed. Certiorari to two decrees of the Circuit Court of Appeals, the first, affirming a decree of the District Court for Minnesota appointing general receivers for a Nebraska insurance company; the second, reversing a decree of the District Court for Nebraska which dismissed a bill LION BONDING CO. v. KARATZ. 79 77 Opinion of the Court. brought by the receivers for the possession of the company’s property. Mr. Halleck F. Rose, with whom Mr. 0. S. Spillman, Attorney General of the State of Nebraska, Mr. John F. Stout, Mr. Arthur R. Wells, Mr. Paul L. Martin and Mr. Amos Thomas were on the brief, for petitioners. Mr. Bruce W. Sanborn, with whom Mr. William G. Graves, Mr. Samuel G. Ordway and Mr. William R. Kueffner were on the briefs, for respondents. Mr. Francis R. Stoddard, Jr., Superintendent of Insurance of the State of New York, and Mr. Clarence C. Fowler, by leave of court, filed a brief as amici cur ice. Mr. Justice Brandeis delivered the opinion of the Court. These two cases arise out of the insolvency of the Lion Bonding and Surety Company, a Nebraska insurance corporation. They are here on writs of certiorari to the United States Circuit Court of Appeals for the Eighth Circuit. In the Karatz case, it affirmed a decree of the federal court for Minnesota which appointed receivers in a suit brought by an unsecured simple contract creditor. See 280 Fed. 532. In the Hertz case, it reversed a decree of the federal court for Nebraska, which dismissed a suit brought by those receivers for possession of the company’s property, 280 Fed. 540. At the date of each decree the property of the company in Nebraska was held by the Department of Trade and Commerce of that State, with the usual powers of a receiver, under a decree of a state court. The Circuit Court of Appeals directed, in the Hertz case, that the lower court enjoin the Department from doing any act in relation to the property, except to hold custody thereof subject to the further order of the federal court for Minnesota. Petitioners ask that the judgments of the appellate court be reversed and that the bills in the 80 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. federal district courts be dismissed. The grounds on which jurisdiction was asserted by the federal courts makes necessary a fuller statement of the facts. The Lion Bonding & Surety Company had for some years prior to 1921 been licensed to conduct the business of insurance in Nebraska; and was doing business and had property also in eighteen other States. A statute of Nebraska commits to its Department of Trade and Commerce the supervision of insurance companies and control thereof in case of insolvency and otherwise. (Compiled Statutes, Nebraska, 1922, §§ 7745-7748.) Nebraska Laws, 1919, c. 190, Title 5, Article III, p. 576-581. Paragraph 1 of § 4 of that act provides: 11 Whenever any domestic company is insolvent . . . or is found, after an examination, to be in such condition that its further transaction of business would be hazardous to its policy holders, or to its creditors, or to its stockholders, or to the public; . . . the department . . . may apply to the district court ... in the county ... in which the principal office of such company is located, for an order directing such company to show cause why the department . . . should not take possession of its property, records and effects and conduct or close its business, and for such other relief as the nature of the case and the interest of its policy holders, creditors, stockholders or the public may require.” On April 12, 1921, the Department applied to the District Court of Douglas County, Nebraska, for an order directing it to take possession of the property and to conduct the business of the company, under paragraph 2 of § 4, which provides: 11 On such application, or at any time thereafter, such court or judge may, in his discretion, issue an order restraining such company from the transaction of its business, or disposition of its property, records, and effects until the further order of the court. On the return of such order to show cause, and after a full hearing, the LION BONDING CO. v. KARATZ. 81 77 Opinion of the Court. court shall either deny the application or direct the department . . . forthwith to take possession of the property, records and effects, and conduct the business of such company, and retain such possession . . . until on application of the department ... or of such company, it shall, after a like hearing, appear to the court that the cause of such order directing the department ... to take possession has been removed, and that the company can properly resume possession of its property, records and effects, and the conduct of the business.” The petition prayed also for an order restraining the company from the transaction of its business or from disposing of any of its property; and for other and further relief. The company immediately filed an answer, by which it admitted the material allegations of the petition, and joined in the prayer thereof. On the same day the state court entered a decree in accordance with the prayer; the Department entered upon the duties prescribed by the decree; it immediately took possession of all the property of the company in Nebraska; has since held possession thereof subject to the orders of the state court; and has also obtained like possession of property of the company in other States. On May 28, 1921, the Department filed, in that court, a supplemental petition, in which it prayed for an order directing it to liquidate the business under paragraph 3 of § 4, which provides: “ If, on a like application and order to show cause, and after a full hearing, the court shall order the liquidation of the business of such company, such liquidation shall be made by and under the direction of the department . . . , which may deal with the property, records, effects and business of such company in the name of the department . . . or in the name of the company, as the court may direct and it shall be vested by operation of law with title to all the property, effects, contracts and 51826°—23------6 82 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. rights of action of such company as of the date of the order so directing it to liquidate. ...” The supplemental petition prayed, among other things, that the orders theretofore made, so far as applicable, and necessary to further the liquidation, remain in full force. The company filed an answer by which it admitted the material allegations contained in the supplemental petition and joined in the prayer thereof. On the same day that court entered an order in accordance with the prayer of the supplemental petition, all action of the Department being made subject to the direction of the court. On May 2, 1921, while the decree of the Nebraska court entered April 12, 1921, was in full force and the Department was in actual possession thereunder of the property in that State, Karatz, a citizen of Minnesota, purporting to sue also on behalf of others similarly situated, filed a bill in equity against the company in the federal court for the District of Minnesota, Fourth Division. No disclosure was made of the proceedings taken against the company in the state court of Nebraska, nor that under its decree the Department was in possession of all the company property in that State, and, at least, of some of its property elsewhere. The bill alleged that the company had been admitted to do business in Minnesota; that through its operation there plaintiff had become an unsecured simple contract creditor to the amount of $2,100; that the company had ceased to do business and was insolvent; that it had assets within that district valued at $20,000; and that there was danger that the property of the company would be wasted. The bill prayed that the amount due plaintiff be ascertained and declared a first lien upon all the assets of the company in Minnesota; that, for the purpose of protecting the general public, creditors and stockholders, receivers be appointed to collect all its assets, wherever situated, and to realize upon and distribute the same; that the company be directed to deliver possession to them of all the LION BONDING CO. v. KARATZ. 83 77 Opinion of the Court. property wherever situated; that the company and its officers be restrained from interfering in any way with such receivers; and for general relief. On the filing of this bill the federal court, acting ex parte, appointed Hertz and Levin receivers of all the property of the company wheresoever situated; arid authorized them to apply to any other District Court of the United States in aid of the order so entered. The company (which was served on May 5 by process upon the Insurance Commissioner of Minnesota) moved, on May 14, 1921, to dismiss the Karatz bill for want of federal jurisdiction and for want of equity. A motion was also made to discharge the receivers and to restore the property to the company or to the Department of Trade and Commerce. Both motions were denied on May 30, 1921. The Minnesota receivers secured the appointment of themselves as ancillary receivers by the federal courts for twelve other districts, but not for the Nebraska district. On May 11 and May 12, 1921, they filed, in purported compliance with § 56 of the Judicial Code, certified copies of the bill and of the order of appointment with the clerks of the federal district courts for Nebraska and other States in the Eighth Circuit. On May 14, 1921, the company moved the Circuit Court of Appeals under that section for an order of disapproval of the appointment of receivers, so far as it may be operative outside the District of Minnesota. This motion was denied on May 31, 1921.1 On September 6, 1921, the Minnesota receivers filed in the federal court for the District of Nebraska, Omaha 1 There was this qualification: “That the right of said receivers to the possession of such of the property of said company as is situated in the District of Nebraska shall be subject to such right of possession thereof in the Department of Trade and Commerce of Nebraska as had accrued to it, under proceedings in the District Court of Douglas County in that state, when the right of the receivers arose under the laws of the United States.” 84 OCTOBER TERM, 1922. * Opinion of the Court. 262U.S. Division, a bill in equity (called the Hertz suit) against the company, the Department of Trade and Commerce and others. It charged that there was a conflict of authority between the federal court for Minnesota and the Nebraska state court concerning the administration of the company’s property; that the Department threatened to liquidate the company under the order of the state court entered May 28, 1921; that its rights were limited to the temporary possession and listing of the property authorized by the order of April 12, 1921; and that it had no longer any right to the possession or control of the property either for the administration of the affairs of the company under direction of the state court or otherwise. The bill prayed that defendants be restrained from interfering with the Minnesota receiver’s possession and control; that they be directed to surrender possession to plaintiffs; and for other relief. A motion of defendants to dismiss the bill for want of jurisdiction and for want of equity was granted; and the receivers appealed to the Circuit Court of Appeals. Meanwhile the Karatz case had proceeded to final hearing. On August 11, 1921, a decree was entered adjudicating Karatz’s claim for $2,100; making permanent the appointment of the receivers and continuing their powers to administer the property of the company; and perpetually enjoining it from interfering with the receiver’s control. The company appealed to the Circuit Court of Appeals. That court then heard together appeals in the two cases. On April 28, 1922, it rendered the opinions, 280 Fed. 532, 540, by which, in the Minnesota case, it affirmed the order appointing receivers;2 “ The decree in the Karatz case directly under review here is that entered by the Circuit Court of Appeals on July 7, 1922, pursuant to its per curiam opinion of June 30, 1922, in which it affirmed the final decree of the District Court entered August 11, 1921, for reasons stated in the opinion in that cause, of April 28, 1922, affirming the “ interlocutory order appointing a receiver.” LION BONDING CO. v. KARATZ. 85 77 Opinion of the Court. and in the Nebraska case, reversed the decree dismissing the bill. The decree in the latter was later enlarged by directing the district court to reinstate the bill, and to restrain the Department, the company and their employees: “ from removing, secreting or disposing of the moneys, books, papers, records, assets, property, accounts or choses in action, of or derived from the Lion Bonding and Surety Company, and from doing any other act in relation thereto, except to hold the custody thereof subject to the further order of the United States District Court for the District of Minnesota, Fourth Division.” 3 The decrees of the Circuit Court of Appeals in both cases must be reversed. First. In the Karatz case the motion to dismiss the bill should have been granted. There was want of equity; for it was brought by an unsecured simple contract creditor. Pusey & Jones Co. v. Hanssen, 261 U. S. 491. But there was also the fundamental objection that the district court was without jurisdiction as a federal court. The only ground of jurisdiction alleged is diversity of citizenship. The facts specifically stated show that the amount in controversy was less than $3,000. Plaintiff’s claim against the company was $2,100. He prayed that this debt be declared a first lien on the assets within the State. His only interest was to have that debt paid. The amount of the corporation’s assets, either within or without the State, is of no legal significance in this connection. Nor is the amount of its debts to others. The case is not of that class where the amount in controversy ’In. accordance with this decree of the Circuit Court of Appeals the federal District Court for Nebraska entered a decree for an injunction. From the decree of the District Court the Department appealed directly to this Court on the ground that the District Court was without jurisdiction as a federal court. The appeal was dismissed on October 16, 1922, for lack of jurisdiction in this Court. 260 U. S. 696. 86 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. is measured by the value of the property involved in the litigation. Hunt v. New York Cotton Exchange, 205 U. S. 322, 335; Western & Atlantic R. R. Co. v. Railroad Commission of Georgia, 261 U. S. 264. Nor is it like those cases in which several plaintiffs, having a common undivided interest, unite to enforce a single title or right, and in which it is enough that their interests collectively equal the jurisdictional amount. Troy Bank v. G. A. Whitehead & Co., 222 U. S. 39, 41. In the case at bar, if several creditors of the company, each with a debt less than $3,000, had joined as plaintiffs, the demands could not have been aggregated in order to confer jurisdiction. Rogers v. Hennepin County, 239 U. S. 621; Scott v. Frazier, 253 U. S. 243. Nor can Karatz’s allegation that he sued on behalf of others similarly situated help him. Compare Title Guaranty Co. V. Allen, 240 U. S. 136; Eberhard v. Northwestern Mutual Life Ins. Co., 241 Fed. 353, 356.4 Since the bill in this case discloses that the amount in controversy was less than the jurisdictional amount, the general allegation that it exceeds this amount is, therefore, of no avail. Vance v. W. A. Van-dercook Co. (No. 2), 170 U. S. 468. As the bill should have been dismissed on motion, there is no occasion to consider whether the provisions of the Nebraska statute and the proceedings taken thereunder in the courts of that State, which the defendant set up, constituted a bar to the Karatz suit.6 4 Where a creditor’s bill has been entertained by this Court, the amount of a single plaintiff’s claim has been large enough to satisfy the jurisdictional requirement. Compare Hatch v. Dana, 101 U. S. 205; Johnson v. Waters, 111 U. S. 640; Handley v. Stutz, 137 U. S. 366. 8 Compare O’Neil v. Welch, 245 Fed. 261, 267, 268; Ward v. Foulkrod, 264 Fed. 627, 634. See also Relfe v. Rundle, 103 U. S. 222; Bernheimer v. Converse, 206 U. S. 516; Converse v. Hamilton, 224 U. S. 243. LION BONDING CO. v. KARATZ. 87 77 Opinion of the Court. Second. In the Hertz case, also, the motion to dismiss the bill should have been granted. Being dependent upon the decree in the Karatz suit appointing the receivers, the Hertz suit must necessarily fall with the dismissal of that bill. But there are other insuperable obstacles to the maintenance of the Hertz suit. Hertz and Levin were not anpointed ancillary receivers for Nebraska. They sue in the Nebraska district as Minnesota receivers, relying upon § 56 of the Judicial Code. That section, by its terms, applies only, where in a suit “ in which a receiver shall be appointed the land or other property of a fixed character, the subject of the suit, lies within different States in the same judicial circuit.” It relates to those cases where the fixed property is a unit, extending into several States, like interstate railroads and pipe lines.6 See Public Utilities Commission v. Landon, 249 U. S. 236, 243. It cannot be assumed that the assets of an insurance company are of that character. Those of this company, within the Minnesota district, specifically described in the Karatz bill were alleged to consist of money and credits. The description of the property in Nebraska, given in the Hertz bill, is 11 cash, mortgages and other securities, bills receivable, real estate, stocks and bonds.” The provisions of § 56 extending the operation of a receivership to other districts of the same judicial circuit were, therefore, inapplicable to this case. The motion made, under that section, for disapproval of the order, so far as it may be operative outside the District of Minnesota, should have been granted. As Minnesota receivers merely, Hertz and Levin had no rights whatever in Nebraska. The general rule, that a receiver cannot 6 The scope and effect of this section was stated by Mr. Moon (who introduced it) to be this: “ It applies to a case where a receiver is to be appointed by a district judge covering property that runs across an entire circuit.” Cong. Rec., 61st Cong., 3rd sess., pp. 566, 3998. 88 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. sue in a foreign jurisdiction applied. Great Western Mining Co. v. Harris, 198 U. S. 561. The express authorization (contained in the order of appointment) to apply for aid to other courts could not aid them in this respect. Sterrett v. Second National Bank, 248 U. S. 73. Moreover, even if the federal court for Minnesota would have had jurisdiction to appoint the receivers, and these receivers had secured ancillary appointment in the Nebraska district, the Hertz bill should still have been dismissed; because the property was then in the possession of the state court. What the federal court undertook to do was not to adjudicate rights in personam (as the state court did in Kline v. Burke Construction Co., 260 U. S. 226), but to take the res out of the possession and control of the state court, and to enjoin all action on its part, except as directed by the federal court for Minnesota. It sought to do this, although the state court alone had jurisdiction of the parties and of the subjectmatter, at the time when the proceeding before it was begun; at the time its decree directing the Department to take possession was entered; and at the time possession was taken thereunder. Moreover, the proceeding in the state court was confessedly an appropriate one; the possession taken was actual; and it has been continuous. All this occurred before any suit was begun in any federal court. The federal court did not seek to gain possession and control of the Nebraska property until three months after entry of the decree of the state court directing the Department (which had possession of the res) to proceed with the liquidation. The case is, thus, free of those features which sometimes create difficulty in determining conflicts between courts of concurrent jurisdiction. Where a court of competent jurisdiction has, by appropriate proceedings, taken property into its possession through its officers, the property is thereby withdrawn LION BONDING CO. v. KARATZ. 89 77 Opinion of the Court. from the jurisdiction of all other courts. Wabash R. R. Co. v. Adelbert College, 208 U. S. 38, 54. Compare Oklahoma v. Texas, 258 U. S. 574, 581. Possession of the res disables other courts of coordinate jurisdiction from exercising any power over it. Farmers’ Loan & Trust Co: v. Lake Street Elevated R. R. Co., 177 U. S. 51, 61. The court which first acquired jurisdiction through possession of the property is vested, while it holds possession, with the power to hear and determine all controversies relating thereto. It has the right, while continuing to exercise its prior jurisdiction, to determine for itself how far it will permit any other court to interfere with such possession and jurisdiction. Palmer v. Texas, 212 U. S. 118,126,129. The assertion of control by the federal courts over property in the possession of the state court, is sought to be justified on the following ground: The possession taken by the Department under the state court’s decree of April 12, 1921, was only for a temporary purpose; namely, to conduct the business until the company could properly resume the conduct thereof. True, the supplemental decree entered by the state court on May 28, 1921, directed the Department to liquidate the business as provided in the statute. But, meanwhile, on May 2, 1921, suit had been brought by Karatz in the federal court for Minnesota; and it had obtained jurisdiction over the company’s assets by its appointment ex parte of receivers. So, the court says, 280 Fed. 542, 11 its right to the possession by its receivers is superior to that of the state court. It follows that the receivers appointed by it are entitled to the possession of the company’s records and assets as against the Department of Trade and Commerce.” This contention is opposed to the settled principles which govern the relations of courts of concurrent jurisdiction. It is inconsistent, also, with § 265 of the Judicial Code, which prohibits courts of the United States from 90 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. staying proceedings in courts of a State. Essanay Film Manufacturing Co. v. Kane, 258 U. S. 358. The Nebraska court was confessedly a court of competent jurisdiction. While it was in possession of the res, it entered a supplemental decree directing the Department to liquidate the company. The statute of the State expressly provides for such liquidation. The original petition of April 12, 1921, clearly contemplated it and contained a prayer for general relief. The claim is that the application for liquidation is a new and independent proceeding; and that jurisdiction over the res had terminated before entry of the supplemental decree, although the courts’ possession of the res continued. The claim is groundless. But if the legality of the state court’s action was to be questioned, it could be done only by laying the proper foundation through appropriate proceedings in that court. Covell v. Heyman, 111 U. S. 176, 179; Byers v. McAuley, 149 U. S. 608, 614. Compare Laing v. Rigney, 160 U. S. 531; Metcalf v. Barker, 187 U. S. 165; Pickens v. Roy, 187 U. S. 177; Murphy v. John Hofman Co., 211 U. S. 562, 569. If such action had been taken and relief had been denied there, resort could thep have been had to appellate proceedings. Wiswall v. Sampson, 14 How. 52. But the judgment of the state court, which had possession of the res, could not be set aside by a collateral attack in the federal courts. Mutual Reserve Fund Life Association v. Phelps, 190 U. S. 147, 159, 160. Nor could it be ignored. Shields v. Coleman, 157 U. S. 168. Lower federal courts are not superior to state courts. Reversed. EX PARTE FULLER. 91 Counsel for Parties. EX PARTE: IN THE MATTER OF FULLER ET AL., INDIVIDUALLY AND AS COPARTNERS UNDER THE NAME OF E. M. FULLER & COMPANY, PETITIONERS. APPLICATION FOR A STAY OF ORDERS OF DISTRICT COURT PENDING APPEAL. No. —. Motion for stay submitted April 27, 1923.—Decided April 30, 1923. One who becomes a bankrupt has no right, under the Fourth and Fifth Amendments to the Constitution, to resist delivery of his books and papers to the trustee in bankruptcy or affix conditions as to their use, upon the ground that they may be used to incriminate him. P. 93. Application denied. This was an application, made here to stay, pending appeal, two orders of the District Court requiring a receiver in bankruptcy and the bankrupts and their attorneys to turn over certain books and papers to the trustee in bankruptcy. Mr. William J. Fallon, Mr. Eugene F. McGee and Mr. Arthur Garfield Hays, for petitioners, in support of the motion. Mr. Francis L. Kohlman, for the trustee in bankruptcy, in opposition to the motion. Mr. William M. Chadbourne, Mr. Cyrus F. Smythe and Mr. C. R. Ward, for the Creditors’ Committee of E. M. Fuller & Company, in opposition to the motion. Mr. Joab H. Banton, District Attorney for New York County, Mr. John Caldwell Myers and Mr. Hugo Wint-ner, by leave of court, filed a memorandum in opposition to the motion, as amici curice. 92 OCTOBER TERM, 1922. Opinion of the Court. 262U.S. Mr. Chief Justice Taft delivered the opinion of the Court. On June 26, 1922, a petition in involuntary bankruptcy was filed against Fuller and McGee, individually and as partners, in the name of E. M. Fuller & Company, in the District Court for the Southern District of New York. Thereafter Strasbourger was appointed Receiver and at once demanded of the bankrupts the books of accounts, records, documents, both of themselves individually and of the firm. The bankrupts claimed that the books would tend to incriminate them and refused to turn them over unless the Receiver agreed that they were to be used in connection with the civil administration of bankrupts’ estate only. A stipulation of this kind was made between the Receiver and the attorneys for the bankrupts, with the further specific agreement that the books and records would not be turned over to any district attorney or used before any grand or petit jury. The district attorney, County of New York, then attempted to bring the books and records into the state court by serving a subpoena upon the Receiver. Judge Augustus Hand, at the petition of the bankrupts, enjoined the Receiver from turning the books over. On April 6, 1923, the attorneys for the bankrupts demanded of the Receiver that he return the books and papers to them because his receivership had terminated by the appointment of a trustee in bankruptcy. The Referee in bankruptcy directed the Receiver to turn the books and papers over to the Trustee without condition or restriction. On review, this order was affirmed by Circuit Judge Mack sitting in bankruptcy. April 21st last, all the books and papers were then delivered over to the Trustee except certain books and papers which had been redelivered by the Receiver to the attorneys for the bankrupts on their receipts which were turned over to EX PARTE FULLER. 93 91 Opinion of the Court. the Trustee. The bankrupts objected to turning over the books and papers thus receipted for by their attorneys to the Trustee. Thereupon on April 24, 1923, Judge Mack made a second order directing the attorneys for the bankrupts and the bankrupts to turn over these records and papers so withheld by them to the Trustee. On April 21st, the District Attorney of New York County had subpoenaed the Trustee to produce the books and papers of the bankrupts he then had in his custody and on the 24th of April offered them in evidence in the Court of General Sessions of New York as evidence against E. M. Fuller under an indictment arising out of the business of the bankrupts. On the 25th of April Judge Mack granted an application for a stay pending proceedings for appeal to this Court and an application for a stay here; and Judge Nott presiding in the state court adjourned the trial there until April 30th. Proceedings for appeal to this Court have now been begun under the authority of Perlman v. United States, 247 U. S. 7, and the application for a stay of Judge Mack’s two orders has now been made. A man who becomes a bankrupt or who is brought into a bankruptcy court has no right to delay the legal transfer of the possession and title of any of his property to the officers appointed by law for its custody or for its disposition, on the ground that the transfer of such property will carry with it incriminating evidence against him. His property and its possession pass from him by operation and due-proceedings of law, and when control and possession have passed from him, he has no constitutional right to prevent its use for any legitimate purpose. His privilege secured to him by the Fourth and Fifth Amendments to the Constitution is that of refusing himself to produce, as incriminating evidence against him, anything which he owns or has in his possession and control, but his privilege in respect to what was his and in his custody 94 OCTOBER TERM, 1922. Syllabus. 262 U. S. ceases on a transfer of the control and possession which takes place by legal proceedings and in pursuance of the rights of others, even though such transfer may bring the property into the ownership or control of one properly subject to subpoena duces tecum. These conclusions follow from the principles announced by this Court in the Matter of Harris, 221 U. S. 274, 279, and Johnson v. United States, 228 U. S. 457. In considering the correctness of Judge Mack’s orders, it is wholly immaterial what stipulation had been entered into between the Receiver and the bankrupts in regard to the use to be made pending the receivership of the books and papers or what sanction Judge Hand’s action had given the stipulations. With the appointment of the Trustee both the title and the right to possession of such books and papers passed to him and Judge Mack’s orders properly confirmed this result. The Receiver, the bankrupts and their attorney must yield possession and title to the Trustee. Neither can accompany the delivery he is bound by law to make with any effective conditions restricting use of the books, papers or other property of the bankrupts’ estate as evidence against them. The application is denied. PEOPLE OF THE STATE OF NEW YORK EX REL. CLYDE v. GILCHRIST, PRESIDENT, ET AL., AS MEMBERS OF THE STATE TAX COMMISSION OF THE STATE OF NEW YORK. ERROR TO THE SUPREME COURT OF THE STATE OF NEW YORK. No. 318. Argued April 17, 1923.—Decided April 30, 1923., 1. Upon error to a state court, when a statute is alleged to impair the obligation of a contract, this Court must decide for itself whether there was a contract and what it was. P. 96. CLYDE v. GILCHRIST. 95 94 Opinion of the Court. 2. But where the contract claimed is one of tax exemption, involving the taxing system of the State, this Court will be slow to depart from a judgment of the state courts denying it, if no real oppression or manifest wrong result. P. 97. 3. The New York Mortgage Recording Tax Law, Art. XI, § 251, in providing that payment of the taxes therein provided on recording of mortgages should exempt them and the debts and obligations thereby secured from other taxation; and Art. XV of the Tax Law, as amended by c. 802, N. Y. Laws, 1911, in providing that, upon payment on other secured debts of a tax of % of 1% of their face value, and certification by the Comptroller, they should be exempt from all taxation, with specified exceptions,— were not intended to establish contracts with those paying such taxes exempting them from taxation of their income from such debts and mortgages. Pp. 97, 99. 197 App. Div. 913; 232 N. Y. 550, affirmed. Error to a judgment of the Supreme Court of New York (affirmed by the Court of Appeals) confirming, in a statutory proceeding, an assessment under the state income tax law. Mr. Arthur E. Goddard for plaintiff in error. Mr. Carl Sherman, Attorney General of the State of New York, Mr. Francis W. Cullen, Mr. James S. Y. Ivins and Mr. C. T. Dawes, for defendants in error, submitted. Mr. Justice Holmes delivered the opinion of the Court. This is a statutory proceeding to recover the amount of taxes for 1919 paid under duress and protest. As the first step the relator, the plaintiff in error, filed an application for a revision of the tax with the Comptroller of the State. His determination presented the issue in a few words. The relator held bonds secured by mortgages upon which latter the mortgage recording tax under Article XI of the Tax Law had been paid. She also held secured debts upon which a tax had been paid under Article XV of the Tax Law as amended by c. 802 of the 96 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. Laws of 1911. An additional assessment was made under the Income Tax Law of 1919, c. 627, on account of the relator’s income from these bonds and debts. The relator seems to have contended that if the Income Tax Law imposed the additional assessment it was unconstitutional as impairing the obligation of contracts made by the statutes laying the taxes first mentioned. The Comptroller held that the additional assessment was correct and that no payment was unlawfully exacted. His determination was confirmed by the Appellate Division of the Supreme Court, and the order of the Appellate Division was affirmed by the Court of Appeals. No opinion was delivered by either Court. The case was brought here by writ of error and the defendant in error moved to dismiss on the ground that it does not appear that the judgment below necessarily decided a question that can be brought here in this way. Cuyahoga River Power Co. v. Northern Realty Co., 244 U. S. 300, 304 The position of the relator is that where the ground of judgment does not appear this Court will not assume that the Court below proceeded upon ground clearly untenable, and that therefore if the only one that seems plausible opens a constitutional question raised upon the record, this Court will proceed to deal with it. Adams v. Russell, 229 U. S. 353, 358. The only ground suggested by the defendant in error as local is that the decision of the Appellate Division at least is shown to have gone upon the construction of. the exempting statutes by an opinion rendered at the same time as the present judgment, to the effect that the exemption of mortgages by the Mortgage Recording Tax Law, if a contract, did not extend to the interest upon the debt. New York ex rel. Centred Union Trust Co. v. Wendell, 197 App. Div. 131. To this the relator rightly replies that when a statute is alleged to impair the obligation of a contract this Court must decide for itself whether there was a contract CLYDE v. GILCHRIST. 97 94 Opinion of the Court. and what it was. Detroit United Ry. n. Michigan, 242 U. S. 238, 249. Columbia Water Power Co. v. Columbia Electric Street Railway, Light Power Co., 172 U. S. 475, 487. The relator in her petition to the Supreme Court failed to call attention in terms to the provision of the Constitution relied upon. Harding v. Illinois, 196 U. S. 78, 88. But she set forth that the exemptions claimed were granted by the statutes under which the earlier taxes were fixed, that they were secured for a valuable consideration, the payment of those taxes, and that the subsequent tax upon the income of the bonds and securities violated the provisions of the Constitution of the United States. We shall assume in her favor that Article I, § 10, was sufficiently indicated as the clause upon which she relied. Nevertheless we are not satisfied that the relator is entitled to prevail. It is apparent that the New York Courts held that there was no contract of the kind that is alleged. It would be extravagant to suppose that they upheld a law admitted to impair the obligation of an admitted contract. The opinion of the Supreme Court shows clearly enough the general nature of the defense sustained. The relator contends and must contend that this is so. While it is true that we are not bound by the construction of the New York statutes by the New York Courts in deciding the constitutional question, yet when we are dealing with a matter of local policy, like a system of taxation, we should be slow to depart from their judgment, if there was no real oppression or manifest wrong in the result. Troy Union R. R. Co. v. Mealy, 254 U. S. 47, 50. The Mortgage Recording Tax Law, Article XI, §251, provides that all mortgages of real property situated within the State that are taxed by that article and the debts and obligations that they secure shall be exempt 51826°—23-------7 98 OCTOBER TERM, 1922. Opinion of the Court. 262U.S. from other taxation by the state and local subdivisions. The caution that should be used before interpreting such declarations of legislative policy as promises, even when they manifestly tend and are expected to induce voluntary action, is illustrated in Wisconsin & Michigan Ry. Co. v. Powers, 191 U. S. 379, 386. Troy Union R. R. Co. v. Mealy, 254 U. S. 47, 50. But the Appellate Division, in the case that we have cited, while having this caution in mind, preferred to assume without deciding that there was a contract of exemption, but held that it did not extend to this income tax. The Court recognized that for many purposes a tax upon the interest received from a mortgage debt is a tax upon the mortgage; but for the purpose of construing the words of a statute it rightly recognized that a distinction might be taken. That a distinction was intended, or rather that the Legislature had in mind only a tax upon the principal debt or obligation, it deduced from a nice consideration of the words of the statute, which led it to the conclusion that “ the dominant idea in the mind of the Legislature was to render mortgagees independent of the action, capricious or otherwise, of local tax officials.” Considering that only the principal of mortgages was taxed when the law was passed and that in those days no one thought of an income tax; that any contract of exemption must be shown to have been indisputably within the intention of the Legislature; that it is difficult to believe that the Legislature meant to barter away all its powers to meet future exigencies for the mere payment of a mortgage recording tax; and that a tax upon the individual measured by net income might be regarded as one step removed from a tax on the capital from which the income was derived, Peck & Co. v. Lowe, 247 U. S. 165,175; it held that there was no promise that the present tax should not be imposed. With regard to the mortgages the conclusion does not seem to us very difficult to reach. The State did not need to offer a bar CLYDE v. GILCHRIST. 99 94 Opinion of the Court. gain to induce mortgagees to record their deeds. Federal Land Bank of New Orleans v. Crosland, 261 U. S. 374. The provision as to the tax on secured debts other than the foregoing is to the effect that any person may send them or a description of them to the Comptroller and may pay a tax of one-half of one per centum on the face value and that thereupon the Comptroller by indorsement or receipt shall certify that they are exempt from taxation and that thereafter they shall be exempt from all taxation in the State or local divisions of the State with certain specified exceptions. Laws of 1911, c. 802, §331. This is an alternative to a tax, at such rate as may be fixed, on the fair market value of the security. § 336. There is an argument that it relates only to the year for which payment is made, and, although for reasons indicated in Wisconsin & Michigan Ry. Co. v. Powers, supra, consideration seems to be of little importance except as bearing on interpretation, that the payment of an alternative tax is consideration for exemption from nothing except its alternative. On the other hand the provision for an indorsement upon the security hardly is reconcilable with less than a permanent exemption; it is said that so the law generally has been understood; and the ground taken by the Appellate Division in the case that we have cited indicates that they were not prepared to deny that the exemption even of mortgages looked beyond the year. In the absence of further opinion it seems fair to assume that the Appellate Division and the Court of Appeals decided against the exemption for the reasons stated in New York ex rel. Central Union Trust Co. v. Wendell, 197 App. Div. 131, of which we have given a summary. As we said at the outset we ought to be slow to depart from the judgment of the Courts of the State in a case like this and we accept their conclusion also with regard to secured debts. We are not prepared to say that the judgment was wrong and therefore it is affirmed. Judgment affirmed. 100 OCTOBER TERM, 1922. . Title. 262 U. S. CUNARD STEAMSHIP COMPANY, LTD., ET AL. v. MELLON, SECRETARY OF THE TREASURY, ET AL. . OCEANIC STEAM NAVIGATION COMPANY, LTD., v. MELLON, SECRETARY OF THE TREASURY, ET AL. INTERNATIONAL NAVIGATION COMPANY, LTD., v. MELLON, SECRETARY OF THE TREASURY, ET AL. COMPAGNIE GENERALE TRANSATLANTIQUE v. MELLON, SECRETARY OF THE TREASURY, ET AL. NETHERLANDS - AMERICAN STEAM NAVIGATION COMPANY (HOLLAND AMERICA LINE) v. MELLON, SECRETARY OF THE TREASURY, ETAL. LIVERPOOL, BRAZIL & RIVER PLATE STEAM NAVIGATION COMPANY, LTD., v. MELLON, SECRETARY OF THE TREASURY, ET AL. ROYAL MAIL STEAM PACKET COMPANY v. MELLON, SECRETARY OF THE TREASURY, ET AL. UNITED STEAMSHIP COMPANY OF COPENHAGEN (SCANDINAVIAN AMERICAN LINE) v. MELLON, SECRETARY OF THE TREASURY, ET AL. PACIFIC STEAM NAVIGATION COMPANY v. MEL LON, SECRETARY OF THE TREASURY, ET AL. NAVIGAZIONE GENERALE ITALIANA v. MELLON, SECRETARY OF THE TREASURY, ET AL. CUNARD S. S. CO. v. MELLON. 101 100 Syllabus. INTERNATIONAL MERCANTILE MARINE COMPANY v. STUART, ACTING COLLECTOR OF CUSTOMS FOR THE PORT OF NEW YORK, ET AL. UNITED AMERICAN LINES, INC., ET AL. v. STUART, ACTING COLLECTOR OF CUSTOMS FOR THE PORT OF NEW YORK, ET AL. APPEALS FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK. Nos. 659-662, 666-670, 678, 693, 694. Argued January 4, 5, 1923.— Decided April 30, 1923. 1. The words “ transportation ” and “ importation,” in the Eighteenth Amendment, are to be taken in their ordinary sense, the former comprehending any real carrying about or from one place to . another, and the latter any actual bringing into the country from the outside. P. 121. 2. The word “territory,” in the Amendment (in the phrase “the United States and all territory subject to the jurisdiction thereof,”) means the regional areas, of land and adjacent waters, over which the United States claims and exercises dominion and control as a sovereign power,—the term being used in a physical, not a metaphorical sense, and referring to areas and districts having fixity of location and recognized boundaries. P. 122. 3. The territory subject to the jurisdiction of the United States includes the land areas under its dominion and control, the ports, harbors, bays and other enclosed arms of the sea along its coast, and a marginal belt of the sea extending from the coast line outward a marine league, or three geographic miles; and this territory, and all of it, is that which the Amendment designates as its field of operation. P. 122. 4. Domestic merchant ships outside the waters of the United States, whether on the high seas or in foreign waters, are part of the “ territory ” of the United States in a metaphorical sense only, and are not covered by the Amendment. P. 123. 5. The jurisdiction arising out of the nationality of a merchant ship, as established by her domicile, registry and use of the flag, partakes more of the characteristics of personal than of territorial sovereignty, is chiefly applicable to ships on the high seas where there is no territorial sovereign; and, as respects ships in foreign 102 OCTOBER TERM, 1922. Syllabus. 262 U. S. territorial waters, it has little application beyond what is affirmatively or tacitly permitted by the local sovereign. P. 123. 6. The Amendment covers foreign merchant ships when within the territorial waters of the United States. P. 124. 7. A merchant ship of one country, voluntarily entering the territorial limits of another, subjects herself to the jurisdiction of the latter. The jurisdiction attaches in virtue of her presence, just as with other objects within those limits. During her stay she is entitled to the protection of the laws of that place, and correlatively is bound to yield obedience to them. The local sovereign may, out of considerations of public policy, choose to forego the exertion of its jurisdiction, or to exert it in a limited way only, but this is a matter resting solely in its discretion. P. 124. 8. The Eighteenth Amendment does not prescribe any penalties, forfeitures, or mode of enforcement, but by its second section leaves these to legislative action. P. 126. 9. The only instance in which the National Prohibition Act recognizes the possession of intoxicating liquor for beverage purposes as lawful, is where the liquor was obtained before the act went into effect and is kept in the owner’s dwelling for use therein by him, his family, and his bona fide guests. P. 127. 10. Examination of the National Prohibition Act, as supplemented November 23, 1921, c. 134, 42 Stat. 222, shows, (a) That it is intended to be operative throughout the territorial limits of the United States, with the single exception of liquor in transit through the Panama Canal or on the Panama Railroad, (6) That it is not intended to apply to domestic vessels when outside the territorial waters of the United States, (c) That it is intended to apply to all merchant vessels, whether foreign or domestic, when within those waters, save as the Panama Canal Zone exception provides otherwise. Pp. 127-129. 11. Congress, however, has power to regulate the conduct of domestic merchant ships when on the high seas, or to exert such control over them when in foreign waters as may be affirmatively or tacitly permitted by the territorial sovereign. P. 129. 12. The antiquity of the practice of carrying intoxicating liquors for beverage purposes as part of a ship’s sea stores, the wide extent of the practice and its recognition in a congressional enactment, do not go to prove that the Eighteenth Amendment and the Prohibition Act could not have been intended to disturb that practice, since their avowed and obvious purpose was to put an end to prior practices respecting such liquors. P. 129. CUNARD S. S. CO. v. MELLON. 103 100 Argument for Appellants. 13. After the adoption of the Amendment and the enactment of the National Prohibition Act, Congress withdrew the prior statutory recognition of liquors as legitimate sea stores. Rev. Stats., § 2775; Act of September 21, 1922, c. 356, Tit. IV, and § 642, 42 Stat. 858, 948, 989. P. 130. 14. The carrying of intoxicating liquors, as sea stores, for beverage purposes, through the territorial waters or into the ports and harbors, of the United States, by foreign or domestic merchant ships, is forbidden by the Amendment and the act. P. 130. 284 Fed. 890, affirmed. 285 Fed. 79, reversed. Appeals from decrees of the District Court dismissing, on the merits, as many suits brought by the appellant steamship companies for the purpose of enjoining officials of the United States from seizing liquors carried by appellants’ passenger ships as sea stores and from taking other proceedings against the companies and their vessels, under the National Prohibition Act. Mr. George W. Wickersham for appellants in Nos. 659-662, 666-670, and 678. I. Neither the Eighteenth Amendment, nor, the National Prohibition Act, properly construed, requires the application of the prohibition to every place where the United States may exercise its power. This statute contained no provision defining the territory within which it should be operative. It, therefore, was governed by the provisions of Rev. Stats., § 1891: “ The Constitution and all laws of the United States which are not locally inapplicable shall have the same force and effect within all the organized Territories, and in every Territory hereafter organized as elsewhere within the United States.” A question having arisen as to the jurisdiction of the courts in the territories and insular possessions of the United States to enforce the act, a section was enacted in the Supplemental Act of November 23, 1921. An examination of the debates preceding this discloses only a 104 OCTOBER TERM, 1922. Argument for Appellants. 262 U. S. most perfunctory consideration of the section. It clearly appears that the dominating purpose underlying its inclusion in the act was to give power to the courts of Hawaii and the Virgin Islands to enforce the statute. There is nothing else in all of the many pages of the Congressional Record devoted to a discussion of these two acts which throws any further light upon the territorial limitations of their application. Especially is there nothing to indicate that Congress was extending the application of the law to any place not previously embraced within the description contained in the Amendment, a the United States and all the territories subject to the jurisdiction thereof.” It surely is a strained construction to hold that a foreign ship temporarily within American waters is embraced within the phrase “ the territories subject to the jurisdiction ” of the United States. Nothing in the legislative history of the act supports the contention that Congress had any such intention. Evidently Congress was in some doubt as to whether or not the National Prohibition Act, ex proprio vigore, applied to territories which had not been embodied within the United States, and, therefore, deemed it necessary specifically to extend it to such territory. The Philippine Islands undoubtedly are territory subject to the jurisdiction of the United States, yet we have not heard that the Eighteenth Amendment ex proprio vigore applies to them, nor that the National Prohibition Act governs them. Moreover, § 20, Tit. Ill, of that act itself involves a recognition of the fact that the statute by its own terms did not apply to everything subject to the jurisdiction of the United States, because it specifically provides for its application to the Canal Zone—which has been defined as not a “ territory ” but “ a place subject to the jurisdiction of the United States ” (25 Ops. Atty. Gen. 441), and also expressly provides that it shall not apply to liquor in transit through that zone by railroad or steamship. CUNARD S. S. CO. v. MELLON. 105 100 Argument for Appellants. It is difficult to understand why, if Congress was right in supposing it could exclude transportation of liquors from the application of the Amendment under any circumstances, it could not exclude it by failure specifically to include, as well as by an exception expressly grafted on to a comprehensive inclusion. In our view, § 20, Tit. Ill, involves the expression of an important recognition by Congress that it has power under the Amendment to exclude from the operations of prohibition in some instances, and, if that be true, the words “territory subject to the jurisdiction thereof ” in the Eighteenth Amendment cannot mean “ wherever the United States may exercise its power,” as contended by the Government. The conclusions announced by this Court in the National Prohibition Cases, 253 U. S. 350, are not at variance with this view. Nor do we think that Grogan v. Walker & Sons Co. and Anchor Line n. Aldridge, 259'U. S. 80, are. In adopting the broad canon of construction which controlled the decision rendered by this Court in the Grogan and Anchor Line Cases, it is evident that the Court placed emphasis upon the controlling force of the admonition contained in § 3 of Tit. II of the National Prohibition Act, enjoining liberality of construction, to the end that the use of intoxicating liquor as a beverage might be prevented. Let us consider what meaning and purpose are to be assigned to the Eighteenth Amendment and the enforcing act. Certainly the first sense of every law must be that the field of its operation is the country of its enactment. This is equally true of the Eighteenth Amendment and the National Prohibition Act. Necessarily, they get their meaning from the field and purpose of their operation—from the conditions which exist in the field or are designed to be established there. The transportation that they prohibit is transportation within that field—that is, the United States and its Territories, “ for 106 OCTOBER TERM, 1922. Argument for Appellants. 262 U. S. beverage purposes.” The transportation and the purposes are, therefore, complements of each other and both must exist to fulfill the declared prohibition. Thus considered, the “ admonition ” which received such emphasis in the adoption of this broad canon of construction, and was relied upon by the lower court herein, loses all force under the circumstances of the instant case. Liberality of interpretation is enjoined to the end “ that the use of intoxicating liquor as a beverage ” may be prevented. These words carry with them an unspoken but necessary qualification, namely, “ within the United States, its Territories, Hawaii, and the Virgin Islands.” We have said that the transportation and purposes are complements of each other and both must exist to fulfill the required prohibition. The foreign steamship lines do not seek to transport liquor through,"for use as a beverage within, the United States, its Territories, Hawaii, or the Virgin Islands. II. A foreign ship temporarily within the waters of the United States is not “ territory subject to the jurisdiction ” of the United States, within the meaning of the Eighteenth Amendment and the National Prohibition Act. The jurisdiction exercised by a State over foreign vessels within her waters has been the subject of much controversy. On the one hand, it is held that, in a sense, the vessel is part of the territory of the Nation to which it belongs, and those on board are subject to its laws, even in a foreign port (Vattel, book 1, c. 19, § 216; Wheat. Int. Law, 157; Brown v. Duchesne, 19 How. 183; Wilson v. McNamee, 102 U. S. 572; United States v. Bowman, 260 U. S. 94), while on the other hand, it is held, with certain reservations, that by voluntarily coming into the waters or ports of one Nation, the ships of another submit themselves to the laws of the former. United States v. Diekel-man, 92 U. S. 520; Wildenhus’s Case, 120 U. S. 1; The CUNARD S. S. CO. v. MELLON. 107 100 Argument for Appellants. Exchange, 7 Cr. 116, 144. See 2 Moore Int. Law Dig., p. 292; 8 Ops. Atty. Gen. 73; Taylor, Int. Law, § 268; Wheaton, Int. Law, 5th Eng. ed. (Phillipson), p. 169; 2 Wharton, Conflict of Laws, 3d ed., §§ 816, 817; 42 Albany Law Jour., pp. 345-353; 1 Oppenheim, Int. Law, 3d ed., § 189; Ortolan, Diplomatie de la Mer, vol. 1, pp. 192, 193; Gregory, 2 Mich. Law Rev., p. 333; 1 Halleck, Int. Law, 4th ed. (Baker), pp. 245-247; Wheaton, El. Int. Law, 8th ed., § 95, note 58; United States v. Bowman, 260 U. S. 94. HI. The courts will never give a construction to a statute contrary to international law or the accepted custom and usage of civilized nations, when it is possible reasonably to construe it in any other manner. The Paquete Habana, 175 U. S. 677; Murray v. Schooner Charming Betsy, 2 Cr. 64. The same rule, a fortion, should apply to the construction of a provision in the Constitution. Presumably, provisions of the latter are not intended to regulate the affairs of foreign nations or to upset established international usage. If, as we contend, the Amendment does not foreclose the question, then it becomes one of statutory construction, namely, whether Congress intended to disregard the long established general rule respecting the jurisdiction of the country of a visiting ship over its internal affairs and to impose its will with respect to such internal management, in cases which cannot in any respect be considered as affecting the peace and order of the port into which the ships come. In construing other statutes which might affect such internal management, the federal courts have been careful to avoid, unless constrained by the obvious, inescapable meaning of the act, giving such construction to the statute as would lead to a conflict of laws, or interference with well settled international usage, or unduly interfere with the internal management of the ship. The Exchange, 7 Cr. 116, 136, 146; Murray v. 108 OCTOBER TERM, 1922. Argument for Appellants. 262U.S. Schooner Charming Betsy, supra, 118; The Brig Wilson v. United States, Fed. Cas. No.’ 17,846; Brown v. Duchesne, 19 How. 183; The State of Maine, 22 Fed. 734; The Kestor, 110 Fed. 432; Patterson v. Bark Eudora, 190 U. S. 169; Wildenhus’s Case, 120 U. S. 1, 11,12; Sandberg v. McDonald, 248 U. S. 185; Neilson n. Rhine Shipping Co., 248 U. S. 205. So it uniformly has been held that the acts prohibiting the bringing of Chinese laborers to the United States are not violated by a foreign vessel coming into one of our ports with Chinese as seamen or members of the crew. In re Moncan, 14 Fed. 44; United States v. Ah Fook, 183 Fed. 33; United States v. Burke, 99 Fed. 895; United States v. Jamieson, 185 Fed. 165; appeal dismissed 223 U. S. 744. See Taylor v. United States, 207 U. S. 120; Scharren-berg v. Dollar S. S. Co., 245 U. S. 122. The executive departments also always have exercised like care in avoiding such interpretative application of statutes as unnecessarily to interfere with international commercial relations. 27 Ops. Atty. Gen. 440. The care which Congress used to exclude opium from our territorial waters serves also to point out the underlying distinction between the situation there existing and the facts of the instant case. Section 5 of the Opium Act dealt only with smoking opium, which had no legitimate uses and which for years had been considered an international outlaw, the mere presence of which within their borders was considered intolerable by all civilized nations. Here,- on the other hand, it appears from an examination of the National Prohibition Act that Congress has permitted the possession and use of intoxicating beverages in the homes of our people if acquired prior to the effective date thereof. The act also repeatedly recognizes as legal the existence of large quantities of bonded liquor within the United States, as also the manufacture, sale and trans- CUNARD S. S. CO. v. MELLON. 109 100 Argument for Appellants. portation of intoxicating liquor for other than beverage purposes (§3 and § 37 of Tit. II). It cannot, therefore, be said that the National Prohibition Act imposes an unqualified prohibition, still less can it be said that Congress intended to prevent the mere presence within our borders of intoxicating beverages under any and all circumstances; for the act itself proves a contrary intention. Congress has not only failed to use language sufficient to indicate that liquor could not be possessed within our borders for any purpose, but, under the system of qualified prohibition imposed by the act, there was no reason why it should prohibit the presence of such liquor within our territorial waters as an incidental element to the continuation of international commerce, sanctioned by the usage and custom of civilized nations since the inception of our Government. In marked contrast with this, also, is the record of congressional action respecting the subject under consideration in the cases at bar. From the date of the enactment of the National Prohibition Act, foreign ships had been bringing into American waters and ports liquors as a part of the ships’ stores, for consumption by passengers and crew on the high seas, with the approval and subject to regulations promulgated by the Treasury Department, in conformity with international usage and the uniform course of American law and regulation from the foundation of the Government. This was a matter of newspaper notoriety and general knowledge. Treasury decisions had been promulgated which sanctioned the practice, and the Attorney General of the United States had declared its legality and laid down the rules under which it should be conducted. And yet, in the legislation of 1921, by which Congress sought to strengthen the law in other directions and to clothe the courts of the Territory of Hawaii and the Virgin Islands with jurisdiction to enforce the/ act, no mention was made of this subject and no attempt to broaden the scope of the law, 110 OCTOBER TERM, 1922. Argument for Appellants. 262 U. S. so as to apply it to foreign vessels in American ports. It seems incredible that, if Congress had intended to apply prohibition to foreign merchant ships, it would not have expressed such intention in the amending act. The fact that it did not, furnishes strong evidence that it had no intention of interfering with the well established usages of international commerce. This moreover is emphasized by the fact that § 5 of the amending act expressly dealt with the application of prohibition to common carriers by land and sea. It is important to note in this connection that the provisions of the Transportation Act of 1920 are expressly applicable to foreign merchant vessels; and yet, neither the framers of the act, nor those who discussed it on the floors of Congress, suggested that the amending act should be broadened so as to make it clear that the possession by a foreign common carrier by vessel within American waters of intoxicating liquors for beverage purposes, was prohibited by our laws. When Congress legislated with respect to intoxicating liquors in the Territory of Alaska, by Act of February 14, 1917, 39 Stat. 903, it clearly expressed its intention to apply prohibition to vessels within the territorial waters. So in dealing with the Canal Zone, Congress, unrestricted by the limitations of the Constitution or the Eighteenth Amendment, but legislating as a domestic legislature, enacted § 20, Tit. Ill, of the National Prohibition Law. It will be noted that this prohibition went far beyond the Amendment or the National Prohibition Act. It not only prohibited the importation but the introduction into the Canal Zone. It absolutely prohibited possession by an individual or his having under his control any of the described beverages. Then, in order to emphasize its intention that these extreme measures should not be extended so as to interfere with foreign commercial intercourse, it added the proviso. CUNARD S. S. CO. v. MELLON. Ill 100 Argument for Appellants. The provisions affecting the Canal Zone in the National Prohibition Act are not included in the general provisions relating to the United States, but in a specific section incorporated in the act to deal with that place. Section 20, Tit. Ill, places the Canal Zone in a special position. It will be noted that Congress has not said in the proviso that the act shall not apply to liquor in transit through the Panama Canal or on the Panama Railroad, but that “ this section” shall not apply. In other words, as the language of the section goes far beyond the confines of the Amendment and the act, Congress deemed it necessary to disclaim the application of its provisions, that is, the provisions of the section, to commerce passing through the Zone. And, therefore, it cannot be that by referring in § 20 to the carriage on the Panama Canal and on the Panama Railroad, Congress intended that no other transportation of liquor anywhere within the United States, or its possessions, was authorized except through the Canal Zone. The proviso completes the legislation by Congress respecting the Zone, but it has no bearing on the interpretation of the act itself in its application to the United States. It does illustrate the care which Congress has taken in this act, as in so many others, to avoid the implication of legislation affecting foreign merchant vessels, save and except in the particulars where its deliberate and expressed policy was to apply legislation to those ships. IV. Sea stores on merchant ships are considered as part of the ship itself and always have been exempted from tariff and other laws affecting merchandise introduced into the country. 21 Ops. Atty. Gen. 92, 94; Rev. Stats., § 2807, amended by Act June 3, 1892, 27 Stat. 41; United States v. 2^ Coils of Cordage, Fed. Cas. No. 16,566; United States v. One Hempen Cable, Fed. Cas. No. 15,931a; Treasury Circular Dec. 4, 1922; Brough v. Whitmore, 4 Term. Rep. 206; The Dundee, 1 Hagg. Adm. 112 OCTOBER TERM, 1922. Argument for Appellants. 262 U. S. 109; Gale v. Laurie, 5 B. & C. 156; English Marine Insurance Act 1906, Arnould Marine Insurance, 10th ed., vol. 2, p. 1659; id. vol. 1, p. 295. . A further proof of the incorporation of stores into the ship is the fact that they are valued by surveyors, when valuing the ship for general average contribution, as part of the contributory value of the ship. Lowndes, General Average, § 76. It is also a very interesting fact that, in the case of many European nations, a separate list of ship’s stores is considered as part of the ship’s papers, in addition to the ordinary cargo manifest. In this connection see Atherly Jones on Commerce in War, pp. 347-352. United States v. Hawley & Letzerich, 160 Fed. 734. The laws of Italy, France, and Holland require merchant ships trading with their ports to carry and furnish liquors for the consumption of passengers and crew. In those cases, liquors are necessaries within the meaning of the admiralty law. See The Satellite, 188 Fed. 717. It was, therefore, in pursuance of a long applied doctrine of sea law and the consistent legislative policy that, after the adoption ~of the Eighteenth Amendment and the passage of the National Prohibition Act, the Treasury Department promulgated regulations covering sea stores of liquors which have been in force up to the present time. The new opinion of the Attorney General, and the decision of the District Court in the present cases, present to this Court the question of whether or not the necessary construction of the Prohibition Law overrules this consistent, uniform, continued policy of our Government, and, disregarding all international comity, imposes our domestic regulations upon all foreign vessels coming into our ports. V. Even if the foreign steamships within American ports or waters should be considered as territory subject to the jurisdiction of the United States, nevertheless the carriage of intoxicating liquors as part of their sea stores, CUNARD S. S. CO. v. MELLON. 113 100 Argument for Appellants. under the circumstances described in the bill, is not a violation of the Amendment or the statute. It is well settled law, that the carriage of ship stores on board a foreign vessel coming into ports of the United States, and on its departure therefrom, is neither importation into, nor exportation from, the United States. Swan & Finch Co. v. United States, 190 U. S. 143, 144; The Conqueror, 49 Fed. 99, 102; affd. 166 U. S. 110. That the carriage of liquors from one point to another within the United States may not amount to transportation within the prohibition of the Amendment and the statute, is recognized in Street n. Lincoln Safe Deposit Co., 254 U. S. 88. United States v. 254 Bottles of Intoxicating Liquor, 281 Fed. 247. The Amendment does not make mere possession of intoxicating liquors unlawful. Its prohibition applies only when one lawfully in possession when the Amendment took effect seeks to sell or transport it within the United States, etc., or to export it therefrom, for beverage purposes. If the National Prohibition Act goes beyond this, it exceeds the authority conferred upon Congress by the Amendment. We do not construe it as going beyond the Amendment. The act, recognizing the lawfulness of possession of liquors in a private dwelling, makes possession elsewhere only prima facie evidence that it is possessed for an unlawful purpose, and this evidence, of course, is open to rebuttal by the facts of the case. The actual basis of Corneli v. Moore, 257 U. S. 491, is stated in the Grogan Case, 259 U. S. 80. In the cases at bar, the liquors are in the strictest sense in the lawful possession of the owners of the steamships, and they remain immovable within the ship as a part of its sea stores, in effect as a part of the ship, in the same sense in which a cable which had been bought in Liverpool by the master of an American vessel, to replace an old 51826°—23-------8 114 OCTOBER TERM, 1922. Argument for Appellants. 262 U. S. one worn out, was held to be a part of the ship and not to be treated as imported goods, wares or merchandise, in the case of United States v. A Chain Cable, 2 Sumner, 362; Fed. Cas. 14,776. The movement of these liquors within our territorial waters, moreover, can in no proper sense be deemed a “ transportation ” in any accepted sense of the word. The universal and practical conception of transportation, as applied to any article or commodity under any circumstances, presupposes a carrier of some kind or description separate and distinct from the article or thing transported. Gloucester Ferry Co. v. Pennsylvania, 114 U. S. 196, 203. In the present case there is not any separation of the sea stores from the ship. They are incorporated as it were into the body of the ship. Properly considered, sea stores are really aids to transportation rather than the subject matter thereof. While, of course, all parts of the vessel, including masts, spars, tackle and apparel, as well as sea stores, necessarily move with her when she moves, they are not being transported in the sense of that word as understood by our statutes or case law. It is submitted that the transportation prohibited by the Eighteenth Amendment and the National Prohibition Act is transportation in a commercial sense. Undoubtedly this was present in both the Grogan and Anchor Line Cases. Specific reference to the question of transportation is found in §§ 13 and 14 of Tit. II of the act, and here Congress considers the question in some detail by requiring the carriers to mark the consignors’ and consignees’ names on the outside of all packages, in addition to making clear the contents. Under the Street Case, supra, the conveyance from warehouse to residence was held not to be transportation within the act, because the goods were in the owner’s possession in a leased room in a warehouse, and in effect CUNARD S. S. CO. v. MELLON. 115 100 Argument for Appellants. merely transferred by him to his residence. In the Cor-neli Case a different result was reached because the goods were in possession of the warehouse, and the transfer thereof involved commercial transportation of and delivery to the owner at the latter’s residence. Sea stores, like bunker coal, belong to the ship owner and are on board his vessel solely for consumption therein. They are not received from any shipper nor are they to be delivered to any consignee, and transportation is not the purpose of their presence on shipboard. They are brought within the territorial waters of the United States merely because it is unavoidable under the circumstances. If the National Prohibition Act goes beyond the limits of the Amendment, and prohibits mere possession, it is unsupported by the Constitution, and, to that extent at least, unenforceable. While the language of § 3, Tit. II, does prohibit any person to “ possess any intoxicating liquor except as authorized in this act,” read in connection with § 33, Tit. II, such unauthorized possession would appear only to be prima facie evidence of possession for one of the illegal purposes prescribed in the act, and not in and of itself to be punishable. That this construction is correct is emphasized by the provisions of § 20, Tit. Ill, where the congressional intention clearly expressed with respect to the Canal Zone is to make possession in and of itself a crime, as also to prohibit, not only the technical “ importation ” into the Zone, but the introduction of liquor into that specific territory. Not only, too, is possession prohibited, but it is made a crime to have “ under one’s control within the Canal Zone ” any of the specified beverages. If it be suggested that the Prohibition Act, § 33, Tit. II, makes the possession of liquors by any person not legally permitted by its provisions to possess liquor, evidence that such liquor is kept for purposes prohibited by the statute, the answer is that it is only prima facie evidence of that fact. 116 OCTOBER TERM, 1922. Argument for Appellant in No. 693. 262 U. S. It is our contention that the cases of liquor carried as part of ship stores in foreign merchant vessels, also fairly fall within the obvious implication of § 33, Tit. II, and that an intention to confiscate the private property in these liquors and to extend the jurisdiction of an act which is, in the most emphatic sense of the term, a domestic police regulation, over the internal concerns of foreign ships, and thus indirectly to foist our laws and our conception of the proper use of alcohol for beverage purposes, over the people of other Nations whose usages and laws differ from ours, has not been expressed by the Eighteenth Amendment nor by Congress. Mr. Cletus Keating, with whom Mr. John M. Woolsey, Mr. J. Parker Kirlin and Mr. Ira A. Campbell were on the brief, for appellant in No. 693. I. The District Juflge erred in holding that intoxicating liquors which have been legally acquired and which are kept and used only as sea stores by vessels of the United States are within the purview of the Eighteenth Amendment. Sea stores are consumable provisions kept on board a vessel as part of her equipment for the maintenance of her passengers and crew. Intoxicating liquors, having the status of sea stores and their situs on board a vessel, do not come within any of the prohibitions of the Eighteenth Amendment, although kept on board a vessel of the United States within territorial waters of the United States. Intoxicating liquors incorporated as sea stores on a vessel, are not the subject of “ importation into ” the United States. ' When a vessel passes out of our territorial waters, sea stores are not the subject of “ exportation from ” the United States. Intoxicating liquors incorporated into sea stores, whilst kept on board a vessel of the United States, mov- CUNARD S. S. CO. v. MELLON. 117 100 Argument for Appellant in No. 693. ing in territorial waters, are not the subject of “ transportation within ” the United States. The possession of intoxicating liquors, lawfully acquired and kept sealed as sea stores, is legal within the territorial waters of the United States. II. The District Judge erred in holding that vessels of the United States on the high seas and in foreign ports are territory subject to the jurisdiction of the United States, within the meaning of the Eighteenth Amendment, and subject to the penalties of the National Prohibition Act, and hence were not free to sell intoxicating liquors on the high seas and in foreign ports. The Eighteenth Amendment was not necessary to give Congress power to legislate for lands subject to the jurisdiction of the United States and not included among the several States, or for vessels of the United States engaged in foreign or coastwise commerce. Vessels of the United States are not “ territory subject to the jurisdiction of the United States ” within the meaning of the Eighteenth Amendment, nor are they subject to the National Prohibition Act. The National Prohibition Act does not by its terms apply and was not intended to apply to vessels of the United States oh the high seas or in foreign ports. III. The unnecessary adoption of a fiction in constitutional construction that would attribute to the word “territory ” as used in the Eighteenth Amendment a meaning which would include vessels of the United States upon the high seas and in foreign ports, would lead to embarrassing international situations. IV. - Neither the history nor purpose of the Eighteenth Amendment and its enforcement acts indicates any intention on the part of Congress to extend prohibition to vessels of the United States while on the high seas or in foreign ports. 118 OCTOBER TERM, 1922. Argument for Appellants in No. 694. 262 U. S. In considering whether Congress intended that vessels of the United States should be considered “ territory ” within the meaning of the Amendment and the enforcement acts, § 20 of the National Prohibition Act is of great importance. It seems hardly conceivable that Congress would place an additional obstacle in the way of the establishment of an American merchant marine, when the additional burden imposed was not essential to carry out the fundamental purposes of the prohibition reform. Vessels of the United States engaged in foreign trade go to all parts of the world, and are in competition with ships of foreign nations. The construction of the Amendment and the enforcement acts here contended for would not constitute an interference or limitation upon what everyone realizes is a great national reform. Mr. Reid L. Carr, with whom Mr. George Adams Ellis and Mr. Frederick H. Stokes were on the brief, for appellants in No. 694. The word “ territory ” as employed in the Eighteenth Amendment must be construed according to the meaning fixed upon it in our constitutional history. A ship is not territory, within the meaning of the Eighteenth Amendment or the enforcing legislation. As a matter of statutory construction, the Prohibition Acts negative the intention of Congress to extend their operation to vessels of the United States on the high seas or in foreign ports. Mr. Solicitor General Beck and Mrs. Mabel Walker Willebrandt, Assistant Attorney General, with whom Mr. Alfred A. Wheat, Special Assistant to the Attorney General, was on the briefs, for appellees. Mr. Andrew Wilson and Mr. Wayne B. Wheeler, by leave of court, filed a brief as amici curiae. CUNARD S. S. CO. v. MELLON. 119 100 Opinion of the Court. Mr. Justice Van Devanter delivered the opinion of the Court. These are suits by steamship companies operating passenger ships between United States ports and foreign ports to enjoin threatened application to them and their ships of certain provisions of the National Prohibition Act. The defendants are officers of the United States charged with the act’s enforcement. In the first ten cases the plaintiffs are foreign corporations and their ships are of foreign registry, while in the remaining two the plaintiffs are domestic corporations and their ships are of United States registry. All the ships have long carried and now carry, as part of their sea stores, intoxicating liquors intended to be sold or dispensed to their passengers and crews at meals and otherwise for beverage purposes. Many of the passengers and crews are accustomed to using such beverages and insist that the ships carry and supply liquors for such purposes. By the laws of all the foreign ports at which the ships touch this is permitted and by the laws of some it is required. The liquors are purchased for the ships and taken on board in the foreign ports and are sold or dispensed in the course of all voyages, whether from or to those ports. The administrative instructions dealing with the subject have varied since the National Prohibition Act went into effect. December 11, 1919, the following instructions were issued (T. D. 38218): “All liquors which are prohibited importation, but which are properly listed as sea stores on vessels arriving in ports of the United States, should be placed under seal by the boarding officer and kept sealed during the entire time of the vessel’s stay in port, no part thereof to be removed from under , seal for use by the crew at meals or for any other purpose. “ Excessive or surplus liquor stores are no longer dutiable, being prohibited importation, but are subject to seizure and forfeiture. 120 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. “ Liquors properly carried as sea stores may be returned to a foreign port on the vessel’s changing from the foreign to the coasting trade, or may be transferred under supervision of the customs officers from a vessel in foreign trade, delayed in port for any cause, to another vessel belonging to the same line or owner.” January 27, 1920, the first paragraph of those instructions was changed (T. D. 38248) so as to read: “All liquors which are prohibited importation, but which are properly listed as sea stores on American vessels arriving in ports of the United States, should be placed under seal by the boarding officer and kept sealed during the entire time of the vessel’s stay in port, no part thereof to be removed from under seal for use by the crew at meals or for any other purpose. All such liquors on foreign vessels should be sealed on arrival of the vessels in port, and such portions thereof released from seal as may be required from time to time for use by the officers and crew.” October 6, 1922, the Attorney General, in answer to an inquiry by the Secretary of the Treasury, gave an opinion to the effect that the National Prohibition Act, construed in connection with the Eighteenth Amendment to the Constitution, makes it unlawful (a) for any ship, whether domestic or foreign, to bring into territorial waters of the United States, or to carry while within such waters, intoxicating liquors intended for beverage purposes, whether as sea stores or cargo, and (b) for any domestic ship even when without those waters to carry such liquors for such purposes either as cargo or sea stores. The President thereupon directed the preparation, promulgation and application of new instructions conforming to that construction of the act. Being advised of this and that under the new instructions the defendants would seize all liquors carried in contravention of the act as so construed and would proceed to sub- CUNARD S. S. CO. v. MELLON. 121 100 Opinion of the Court. ject the plaintiffs and their ships to penalties provided in the act, the plaintiffs brought these suits. The hearings in the District Court were on the bills or amended bills, motions to dismiss and answers, and there was a decree of dismissal on the merits in each suit. 284 Fed. 890; 285 Fed. 79. Direct appeals under Judicial Code, § 238, bring the cases here. While the construction and application of the National Prohibition Act is the ultimate matter in controversy, the act is so closely related to the Eighteenth Amendment, to enforce which it was enacted, that a right understanding of it involves an examination and interpretation of the Amendment. The first section of the latter declares, 40 Stat. 1050, 1941: “ Section 1. After one year from the ratification of this article the manufacture, sale, or transportation of intoxicating liquors within, the importation thereof into, or the exportation thereof from the United States and all territory subject to the jurisdiction thereof for beverage purposes is hereby prohibited.” These words, if taken in their ordinary sense, are very plain. The articles proscribed are intoxicating liquors for beverage purposes. The acts prohibited in respect of them are manufacture, sale and transportation within a designated field, importation into the same, and exportation therefrom. And the designated field is the United States and all territory subject to its jurisdiction. There is no controversy here as to what constitutes intoxicating liquors for beverage purposes; but opposing contentions are made respecting what is comprehended in the terms “ transportation,” “ importation ” and “ territory.” Some of the contentions ascribe a technical meaning to the words “ transportation ” and “ importation.” We think they are to be taken in their ordinary sense, for it better comports with the object to be attained. In that 122 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. sense transportation comprehends any real carrying about or from one place to another. It is not essential that the carrying be for hire, or by one for another; nor that it be incidental to a transfer of the possession or title. If one carries in his own conveyance for his own purposes it is transportation no less than when a public carrier at the instance of a consignor carries and delivers to a consignee for a stipulated charge. See United States v. Simpson, 252 U. S. 465. Importation, in a like sense, consists in bringing an article into a country from the outside. If there be an actual bringing in it is importation regardless of the mode in which it is effected. Entry through a custom house is not of the essence of the act. Various meanings are sought to be attributed to the term “ territory ” in the phrase “ the United States and all territory subject to the jurisdiction thereof.” We are of opinion that it means the regional areas—of land and adjacent waters—over which the United States claims and exercises dominion and control as a sovereign power. The immediate context and the purport of the entire section show that the term is used in a physical and not a metaphorical sense,—that it refers to areas or districts having fixity of location and recognized boundaries. See United States v. Bevans, 3 Wheat, 336, 390. It now is settled in the United States and recognized elsewhere that the territory subject to its jurisdiction includes the land areas under its dominion and control, the ports, harbors, bays and other enclosed arms of the sea along its coast and a marginal belt of the sea extending from the coast line outward a marine league, or three geographic miles. Church v. Hubbart, 2 Cranch, 187, 234; The Ann, 1 Fed. Cas., p. 926; United States v. Smiley, 27 Fed. Cas., p. 1132; Manchester v. Massachusetts, 139 U. S. 240, 257-258; Louisiana v. Mississippi, 202 U. S. 1, 52; 1 Kent’s Com., 12th ed., *29; 1 Moore CUNARD S. S. CO. v. MELLON. 123 100 Opinion of the Court. International Law Digest, § 145; 1 Hyde International Law, §§ 141, 142, 154; Wilson International Law, 8th ed., § 54; Westlake International Law, 2d ed., p. 187, et seq; Wheaton International Law, 5th Eng. ed. (Phillipson), p. 282; 1 Oppenheim International Law, 3d ed., §§ 185-189, 252. This, we hold, is the territory which the Amendment designates as its field of operation; and the designation is not of a part of this territory but of 11 all ” of it. The defendants contend that the Amendment also covers domestic merchant ships outside the waters of the United States, whether on the high seas or in foreign waters. But it does not say so, and what it does say shows, as we have indicated, that it is confined to the physical territory of the United States. In support of their contention the defendants refer to the statement sometimes made that a merchant ship is a part of the territory of the country whose flag she flies. But this, as has been aptly observed, is a figure of speech, a metaphor. Scharrenberg v. Dollar 8. 8. Co., 245 U. S. 122, 127; In re Ross, 140 U. S. 453, 464; 1 Moore International Law Digest, § 174; Westlake International Law, 2d ed., p. 264; Hall International Law, 7th ed. (Higgins), § 76; Manning Law of Nations (Amos), p. 276.; Piggott Nationality, Pt. II, p. 13. The jurisdiction which it is intended to describe arises out of the nationality of the ship, as established by her domicile, registry and use of the flag, and partakes more of the characteristics of personal than of territorial sovereignty. See The Hamilton, 207 U. S. 398, 403; American Banana Co. v. United Fruit Co., 213 U. S. 347, 355; 1 Oppenheim International Law, 3d ed., §§ 123-125, 128. It is chiefly applicable to ships on the high seas, where there is no territorial sovereign; and as respects ships in foreign territorial waters it has little application beyond what is affirmatively or tacitly permitted by the local sovereign. 2 Moore International 124 OCTOBER TERM, 1922. Opinion of the Court. 262U.S. Law Digest, §§ 204, 205; Twiss Law of Nations, 2d ed., § 166; Woolsey International Law, 6th ed., § 58; 1 Oppenheim International Law, 3d ed., §§ 128, 146, 260. The defendants further contend that the Amendment covers foreign merchant ships when within the territorial waters of the United States. Of course, if it were true that a ship is a part of the territory of the country whose flag she carries, the contention would fail. But, as that is a fiction, we think the contention is right. A merchant ship of one country voluntarily entering the territorial limits of another subjects herself to the jurisdiction of the latter. The jurisdiction attaches in virtue of her presence, just as with other objects within those limits. During her stay she is entitled to the protection of the laws of that place and correlatively is bound to yield obedience to them. Of course, the local sovereign may out of considerations of public policy choose to forego the exertion of its jurisdiction or to exert the same in only a limited way, but this is a matter resting solely in its discretion. The rule, now generally recognized, is nowhere better stated than in The Exchange, 7 Cranch, 116, 136, 144, where Chief Justice Marshall, speaking for this Court, said: 11 The jurisdiction, of the nation within its own territory is necessarily exclusive and absolute. It is susceptible of no limitation not imposed by itself. Any restriction upon it, deriving validity from, an external source, would imply a diminution of its sovereignty to the extent of the restriction, and an investment of that sovereignty to the same extent in that power which could impose such restriction. “All exceptions, therefore, to the full and complete power of a nation, within its own territories, must be traced up to the consent of the nation itself. They can flow from no other legitimate source. CUNARD S. S. CO. v. MELLON. 125 100 Opinion of the Court. “ When private individuals of one nation spread themselves through another, as business or caprice may direct, mingling indiscriminately with the inhabitants of that other, or when merchant vessels enter for the purposes of trade, it would be obviously inconvenient and dangerous to society, and would subject the laws to continual infraction, and the government to degradation, if such individuals or merchants did not owe temporary and local allegiance, and were not amenable to the jurisdiction of the country. Nor can the foreign sovereign have any motive for wishing such exemption. His subjects thus passing into foreign countries, are not employed by him, nor are they engaged in national pursuits. Consequently, there are powerful motives for not exempting persons of this description from the jurisdiction of the country in which they are found, and no one motive for requiring it. The implied license, therefore, under which they enter, can never be construed to grant such exemption.” That view has been reaffirmed and applied by this Court on several occasions. United States v. Diekelman, 92 U. S. 520, 525, 526; Wildenhus’s Case, 120 U. S. 1, 11; Nishimura Ekiu v. United States, 142 U. S. 651, 659; Knott v. Botany Mills, 179 U. S. 69, 74; Patterson v. Bark Eudora, 190 U. S. 169, 176, 178; Stratheam S. S. Co. v. Dillon, 252 U. S. 348, 355-356. And see Butt field v. Stranahan, 192 U. S. 470, 492-493; Oceanic Steam Navigation Co. v. Stranahan, 214 U. S. 320, 324; Brolan v. United States, 236 U. S. 216, 218. In the Patterson Case the Court added: “ Indeed, the implied consent to permit them [foreign merchant ships] to enter our harbors may be withdrawn, and if this implied consent may be wholly withdrawn it may be extended upon such terms and conditions as the government sees fit to impose.” In principle, therefore, it is settled that the Amendment could be made to cover both domestic and foreign 126 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. merchant ships when within the territorial waters of the United States. And we think it has been made to cover both when within those limits. It contains no exception of ships of either class and the terms in which it is couched indicate that none is intended. Such an exception would tend to embarrass its enforcement and to defeat the attainment of its obvious purpose, and therefore cannot reasonably be regarded as implied. In itself the Amendment does not prescribe any penalties, forfeitures or mode of enforcement, but by its second section 1 leaves these to legislative action. With this understanding of the Amendment, we turn to the National Prohibition Act, c. 85, 41 Stat. 305, which was enacted to enforce it. The act is a long one and most of its provisions have no real bearing here. Its scope and pervading purpose are fairly reflected by the following excerpts from Title II: “ Sec. 3. No person2 shall on or after the date when the eighteenth amendment to the Constitution of the United States goes into effect, manufacture, sell, barter, transport, import, export, deliver, furnish or possess any intoxicating liquor except as authorized in this Act, and all provisions of this Act shall be liberally construed to the end that the use of intoxicating liquor as a beverage may be prevented. “ Sec. 21. Any room, house, building, boat, vehicle, structure, or place where intoxicating liquor is manufactured, sold, kept, or bartered in violation of this title, and all intoxicating liquor and property kept and used 1 The second section says: “ The Congress and the several States shall have concurrent power to enforce this article by appropriate legislation.” For its construction, see United States v. Lanza, 260 U. S. 377. ’The act contains a provision (§ 1 of Title II) showing that it uses the word “ person ” as including “ associations, copartnerships, and corporations ” when the context does not indicate otherwise. CUNARD S. S. CO. v. MELLON. 127 100 Opinion of the Court. in maintaining the same, is hereby declared to be a common nuisance. . . “ Sec. 23. That any person who shall, with intent to effect a sale of liquor, by himself, his employee, servant, or agent, for himself or any person, company or corporation, keep or carry around on his person, or in a vehicle, or other conveyance whatever, . . . any liquor ... in violation of this title is guilty of a nuisance . . .” “ Sec. 26. When the commissioner, his assistants, inspectors, or any officer of the law shall discover any person in the act of transporting in violation of the law, intoxicating liquors in any wagon, buggy, automobile, water or air craft, or other vehicle, it shall be his duty to seize any and all intoxicating liquors found therein being transported contrary to law. . . .” Other provisions show that various penalties and forfeitures are prescribed for violations of the act; and that the only instance in which the possession of intoxicating liquor for beverage purposes is recognized as lawful is where the liquor was obtained before the act went in effect and is kept in the owner’s dwelling for use therein by him, his family, and his bona fide guests. As originally enacted the act did not in terms define its territorial field, but a supplemental provision3 afterwards enacted declares that it “ shall apply not only to the United States but to'all territory subject to its jurisdiction,” which means that its field coincides with that of the Eighteenth Amendment. There is in the act no provision making it applicable to domestic merchant ships when outside the waters of the United States, nor any provision making it inapplicable to merchant ships, either domestic or foreign, when within those waters, save in the Panama Canal. There is a special provision dealing 3 Section 3, Act November 23, 1921, c. 134, 42 Stat. 222. 128 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. with the Canal Zone4 which excepts “ liquor in transit through the Panama Canal or on the Panama Railroad.” The exception does not discriminate between domestic and foreign ships, but applies to all liquor in transit through the canal, whether on domestic or foreign ships. Apart from this exception, the provision relating to the Canal Zone is broad and drastic like the others. Much has been said at the bar and in the briefs about the Canal Zone exception, and various deductions are sought to be drawn from it respecting the applicability of the act elsewhere. Of course the exception shows that Congress, for reasons appealing to its judgment, has refrained from attaching any penalty or forfeiture to the transportation of liquor while “ in transit through the Panama Canal or on the Panama Railroad.” Beyond this it has no bearing here, save as it serves to show that where in other provisions no exception is made in respect of merchant ships, either domestic or foreign, within the waters of the United States, none is intended. Examining the act as a whole, we think it shows very plainly, first, that it is intended to be operative throughout the territorial limits of the United States, with the single exception stated in the Canal Zone provision; secondly, that it is not intended to apply to domestic vessels when outside the territorial waters of the United States, 4 The pertinent portion of § 20 of Title III, relating to the Canal Zone, is as follows: “ See. 20. That it shall be unlawful to import or introduce into the Canal Zone, or to manufacture, sell, give away, dispose of, transport, or have in one’s possession or under one’s control within the Canal Zone, any alcoholic, fermented, brewed, distilled, vinous, malt, or spirituous liquors, except for sacramental, scientific, pharmaceutical, industrial, or medicinal purposes, under regulations to be made by the President, and any such liquors within the Canal Zone in violation hereof shall be forfeited to the United States and seized: Provided, That this section shall not apply to liquor in transit through the Panama Canal or on the Panama Railroad.” CUNARD S. S. CO. v. MELLON. 129 100 Opinion of the Court. and, thirdly, that it is intended to apply to all merchant vessels, whether foreign or domestic, when within those waters, save as the Panama Canal Zone exception provides otherwise. In so saying we do not mean to imply that Congress is without power to regulate the conduct of domestic merchant ships when on the high seas, or to exert such control over them when in foreign waters as may be affirmatively or tacitly permitted by the territorial sovereign; for it long has been settled that Congress does have such power over them. Lord v. Steamship Co., 102 U. S. 541; The Abby Dodge, 223 U. S. 166, 176. But we do mean that the National Prohibition Act discloses that it is intended only to enforce the Eighteenth Amendment and limits its field of operation, like that of the Amendment, to the territorial limits of the United States. The plaintiffs invite attention to data showing the antiquity of the practice of carrying intoxicating liquors for beverage purposes as part of a ship’s sea stores, the wide extent of the practice and its recognition in a congressional enactment, and argue therefrom that neither the Amendment nor the act can have been intended to disturb that practice. But in this they fail to recognize that the avowed and obvious purpose of both the Amendment, and the act was to put an end to prior practices respecting such liquors, even though the practices had the sanction of antiquity, generality and statutory recognition. Like data could be produced and like arguments advanced by many whose business, recognized as lawful theretofore, was shut down or curtailed by the change in national policy. In principle the plaintiffs’ situation is not different from that of the innkeeper whose accustomed privilege of selling liquor to his guests is taken away, or that of the dining-car proprietor who is prevented from serving liquor to those who use the cars which he operates to and fro across our northern and southern boundaries. 51826°—23--------9 130 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. It should be added that after the adoption of the Amendment and the enactment of the National Prohibition Act Congress distinctly withdrew the prior statutory recognition of liquors as legitimate sea stores. The recognition was embodied in § 2775 of the Revised Statutes, which was among the provisions dealing with customs administration, and when, by the Act of September 21,1922, those provisions were revised, that section was expressly repealed along with other provisions recognizing liquors as legitimate cargo. C. 356j Title IV and § 642, 42 Stat. 858, 948, 989. Of course, as was observed by the District Court, the prior recognition, although representing the national policy at the time, was not in the nature of a promise for the future. It therefore is of no importance that the liquors in the plaintiffs’ ships are carried only as sea stores. Being sea stores does not make them liquors any the less; nor does it change the incidents of their use as beverages. But it is of importance that they are carried through the territorial waters of the United States and brought into its ports and harbors. This is prohibited transportation and importation in the sense of the Amendment and the act. The recent cases of Grogan n. Walker & Sons and Anchor Line v. Aldridge, 259 U. S. 80, are practically conclusive on the point. The question in one was whether carrying liquor intended as a beverage through the United States from Canada to Mexico was prohibited transportation under the Amendment and the act, the liquor being carried in bond by rail, and that in the other was whether the transshipment of such liquor from one British ship to another in the harbor of New York was similarly prohibited, the liquor being in transit from Scotland to Bermuda. The cases were considered together and an affirmative answer was given in each, the Court saying in the opinion, p. 89: “ The Eighteenth Amendment meant a great revolution in the policy of this country, and presumably and CUNARD S. S. CO. v. MELLON. 131 100 Opinion of the Court. obviously meant to upset a good many things on as well as off the statute book. It did not confine itself in any meticulous way to the use of intoxicants in this country. It forbade export for beverage purposes elsewhere. True this discouraged production here, but that was forbidden already, and the provision applied to liquors already lawfully made. See Hamilton v. Kentucky Distilleries & Warehouse Co., 251 U. S. 146, 151, n. 1. It is obvious that those whose wishes and opinions were embodied in the Amendment meant to stop the whole business. They did not want intoxicating liquor in the United States and reasonably may have thought that if they let it in some of it was likely to stay. When, therefore, the Amendment forbids not only importation into and exportation from the United States but transportation within it, the natural meaning of the words expresses an altogether probable intent. The Prohibition Act only fortifies in this respect the interpretation of the Amendment itself. The manufacture, possession, sale and transportation of spirits and wine for other than beverage purposes are provided for in the act, but there is no provision for transshipment or carriage across the country from without. When Congress was ready to permit such a transit for special reasons, in the Canal Zone, it permitted it in express words. Title III, § 20, 41 Stat. 322.” Our conclusion is that in the first ten cases—those involving foreign ships—the decrees of dismissal were right and should be affirmed, and in the remaining two— those involving domestic ships—the decrees of dismissal were erroneous and should be reversed with directions to enter decrees refusing any relief as respects the operations of the ships within the territorial waters of the United States and awarding the relief sought as respects operations outside those waters. Decrees in Nos. 659, 660, 661, 662, 666, 667, 668, 669, 670 and 678, Affirmed. Decrees in Nos. 693 and 694, Reversed. 132 OCTOBER TERM, 1922. Sutherland, J., dissenting. 262 U. S. Mr. Justice McReynolds, dissents. Mr. Justice Sutherland, dissenting. I agree with the judgment of the Court in so far as it affects domestic ships, but I am unable to accept the view that the Eighteenth Amendment applies to foreign ships coming into our ports under the circumstances here disclosed. It would serve no useful purpose to give my reasons at any length for this conclusion. I therefore state them very generally and briefly. The general rule of international law is that a foreign ship is so far identified with the country to which it. belongs that its internal affairs, whose effect is confined to the ship, ordinarily are not subjected to interference at the hands of another State in whose ports it is temporarily present, 2 Moore, Int. Law Dig., p. 292; United States v. Rodgers, 150 U. S. 249, 260; Wildenhus’s Case, 120 U. S. 1, 12; and, as said by Chief Justice Marshall, in Murray v. Schooner Charming Betsy, 2 Cranch, 64, 118: “ . . . an act of Congress ought never to be construed to violate the law of nations, if any other possible construction remains. . . That the Government has full power under the Volstead Act to prevent the landing or transshipment from foreign vessels of intoxicating liquors or their use in our ports is not doubted, and, therefore, it may provide for such assurances and safeguards as it may deem necessary to those ends. Nor do I doubt the power of Congress to do all that the Court now. holds has been done by that act, but such power exists not under the Eighteenth Amendment, to whose provisions the act is confined, but by virtue of other provisions of the Constitution, which Congress here has not attempted to exercise. With great deference to the contrary conclusion of the Court, due regard for the principles of international comity, which exist be- CUNARD S. S. CO. v. MELLON. 133 100 Sutherland, J., dissenting. tween friendly nations, in my opinion, forbids the construction of the Eighteenth Amendment and of the act which the present decision advances. Moreover, the Eighteenth Amendment, it must not be forgotten, confers concurrent power of enforcement upon the several States, and it follows that if the General Government possesses the power here claimed for it under that Amendment, the several States within their respective boundaries, possess the same power. It does not seem possible to me that Congress, in submitting the Amendment or the several States in adopting it, could have intended to vest in the various seaboard States a power so intimately connected with our foreign relations and whose exercise might result in international confusion and embarrassment. In adopting the Eighteenth Amendment and in enacting the Volstead Act the question of their application to foreign vessels in the circumstances now presented does not appear to have been in mind. If, upon consideration, Congress shall conclude that when such vessels, in good faith carrying liquor among their sea stores, come temporarily into our ports their officers should, ipso facto, become liable to drastic punishment, and the ships themselves subject to forfeiture, it will be a simple matter for that body to say so in plain terms. But interference with the purely internal affairs of a foreign ship is of so delicate a nature, so full of possibilities of international misunderstandings and so likely to invite retaliation that an affirmative conclusion in respect thereof should rest upon nothing less than the clearly expressed intention of Congress to that effect, and this I am unable to find in the legislation here under review. 134 OCTOBER TERM, 1922. Statement of the Case. 262 U. S. CULLINAN v. WALKER, AS COLLECTOR OF INTERNAL REVENUE FOR THE FIRST DISTRICT OF TEXAS. ERROR TO THE DISTRICT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF TEXAS. No. 301. Argued March 9, 1923.—Decided April 30, 1923. 1. The gain accruing to a shareholder through enhancement of the value of his shares, and which, when segregated, becomes legally income subject to the income tax, may be segregated by a dividend made on liquidation of the corporation as well as by an ordinary dividend. P. 137. 2. Partly to comply with its state law and partly to procure additional credit for the business, an oil corporation was dissolved; its trustees in liquidation formed a producing corporation and a pipe line corporation, in the same State, transferred one-half of the assets to each, receiving from each in return its stock and its bonds, transferred all this stock to a holding corporation, which they formed in another State, receiving in exchange its stock, and distributed this stock, with the bonds of the other two existing corporations, among the persons who had been the stockholders of the dissolved concern. The three new corporations had at the time of the distribution no assets other than those so received from the trustees and the value of the assets was the same as when the trustees held them. Held, that the securities thus distributed were not in legal effect a stock dividend, and that a distributee was taxable under the income tax provision of September 8, 1916, c. 463, Tit. I, §§ 1 and 2, 39 Stat. 756, upon the amount by which the securities he received exceeded in value his investment in the shares of the original corporation. P. 136. United States v. Phellis, 257 U. S. 156. Affirmed. Error to a judgment of the District Court in an action against an internal revenue collector to recover back a tax, paid under protest. Mr. John Walsh, with whom Mr. William Wright Moore'and Mr. Beeman Strong were on the brief, for plaintiff in error. CULLINAN v. WALKER. 135 134 Opinion of the Court. Mr. Solicitor General Beck, with whom Mr. Nelson T. Hartson and Mr. P'. C. Alexander were on the brief, for defendant in error. Mr. James Byrne, by leave of court, filed a brief as amicus curiae. Mr. Arthur A. Ballantine, by leave of court, filed a brief as amicus curiae. Mr. Justice Brandeis delivered the opinion of the Court. A tax of $156,212.66 was laid upon Cullinan, under the Act of September 8, 1916, e. 463, Title I, §§ 1 and 2, 39 Stat. 756, 757, for additional gain or income of that year, assessed at $1,571,760. He paid the tax, under protest; and brought, in the federal court for southern Texas, this action against the local collector of internal revenue to recover the amount. The question was whether certain securities received by Cullinan in that year should be deemed gain or income. The case was tried by the court without a jury, upon agreed facts; and judgment was entered for defendant. Cullinan contends that securities issued to him, which the collector treated as gain or income, were, in legal effect, like a stock dividend; and that, under Eisner v. Macomber, 252 U. S. 189, he was not taxable thereon. The Government insists that the securities so distributed were gains or income within the rule laid down in United States v. Phel-lis, 257 U. S. 156, and Rockefeller v. United States, 257 U. S. 176. This issue, presented on the facts hereinafter stated, is the only matter for decision. The case is here on writ of error under § 238 of the Judicial Code, because of the constitutional question involved. Towne v. Eisner, 245 U. S. 418. Farmers Petroleum Company was, in 1915, a Texas corporation, with a capital stock of $100,000. Cullinan 136 OCTOBER TERM, 1922. Opinion of the Court.. 262 U. S. owned 26.64 per cent, of its stock, for which he had paid (in that, and the preceding year) $26,640 in cash. Later in 1915, the company was dissolved under the Texas law; and Cullinan became one of the trustees in liquidation. In 1916 the trustees organized two Texas corporations: Republic Production Company, a producing concern, and American Petroleum Company, a pipe line concern. To these corporations the trustees transferred the assets held by them; one-half in value to each. From each they received $1,500,000 par value of its stock and $1,500,000 par value of its bonds; being the total issues. The trustees also organized under the laws of Delaware a third company: American Republics Corporation, a holding company. To this company the trustees transferred all the $1,500,000 stock of each of the new Texas corporations; from it they received $3,000,000 of its stock. They thus held in 1916 the $3,000,000 stock of the Delaware corporation and the $1,500,000 bonds of each of the new Texas corporations. All these securities the trustees then distributed pro rata among the persons who had been stockholders in Farmers Petroleum Company. Farmers Petroleum Company had been dissolved solely for the purpose of effecting a reorganization. The reorganization was undertaken, partly, in order to separate the pipe lines from the producing properties, which counsel advised was necessary; and, partly, in order to procure credit required for the developing business. The two new Texas corporations had at the time of the distribution of the stock of the Delaware corporation no assets other than those received from the trustees in liquidation. These assets were at the time of distribution of the same value as they were when held by the trustees in liquidation. Cullinan received 26.64 per cent, of each class of security. The stock and bonds distributed were then all worth par. The aggregate value of the securities received by him was $1,598,400. The amount which he CULLINAN v. WALKER. 137 134 Opinion of the Court. had invested in Farmers Petroleum Company was $26,640. On the difference, $1,571,760, the internal revenue collector assessed the tax here in question. Cullinan insists that his gain so ascertained was merely an incident of a reorganization. This was equally true in the Phellis and the Rockefeller Cases. It is sought to differentiate those cases on the ground, that there the distributed stock of the new corporation was technically a dividend paid out of surplus; and that here the segregation is not of that character. But the gain, which when segregated becomes legally income subject to the tax, may be- segregated by a dividend in liquidation, as well as by the ordinary dividend. If the trustees in liquidation had sold all the assets for $6,000,000 in cash, and had distributed all of that, no one would question that the late stockholders of Farmers Petroleum Company would, in the aggregate, have received a gain of $5,900,000, taxable as income. The result would obviously have been the same, if the trustees had taken in payment, and distributed, bonds of the value of $6,000,000, in some new corporations. And the result must, also, be the same where that taken in payment is $3,000,000 of such bonds and $3,000,000 in stock of a third corporation. All the material elements which differentiate the Phellis and Rockefeller Cases from Eisner v. Macomber are present also here. The corporation, whose stock the trustees distributed, was. a holding company. In this respect, it differed from Farmers Petroleum Company, which was a producing and pipe line company. It differed from the latter, also, because it was organized under the laws of another State. It is true that, at the time this Delaware corporation’s stock was distributed, it held the stock of the new oil producing company and likewise the stock of the new pipe line company. But the Delaware corporation was a holding company. It was free, at any time, to sell the whole, or any 138 OCTOBER TERM, 1922. Syllabus. 262 U. S. part, of the stock in either of the new Texas companies and to invest the proceeds otherwise. By such a sale, and change of investments, all interest of the holding company in the original enterprise might be parted with, without, in any way, affecting the rights of its own stockholders. When the trustees in liquidation distributed the securities in the three new corporations, Cullinan, in a legal sense, realized his gain; and became taxable on it as income for the year 1916. Affirmed. YUMA COUNTY WATER USERS’ ASSOCIATION ET AL. v. SCHLECHT ET AL. APPEAL FROM THE CIRCUIT COURT OF APPEALS FOR THE NINTH CIRCUIT. No. 268. Argued February 28, 1923.—Decided April 30, 1923. 1. Preliminary, tentative opinions of the cost of constructing projected irrigation works, expressed by government engineers and officials in official correspondence and in statements at a meeting of prospective water-users, do not constitute the estimate of cost, or the public notice, required by § 4 of the Reclamation Act, and, though relied upon by the water-users in subjecting their lands to the project, do not bind or estop the Government from aftgrwards fixing the construction charges against the lands pursuant to the statute, in accordance with a higher estimate arrived at in the light of further investigation and experience. P. 143. 2. The Reclamation Act, § 4, contemplates a precise and formal public notice, stating the lands irrigable under a project, the limit of area for each entry, the charges per acre, the number of annual instalments, and the time when payments shall commence. P. 144. 3. The determination by the Secretary of the Interior of the practicability of a project and the making of the construction contracts are conditions precedent to the estimate of cost and the public notice, under § 4 of the act. P. 145. 4. The time within which the notice shall be given, after the occurrence of these conditions, is left to the sound discretion of the Secretary; and he may delay the notice while the question of cost remains in doubt. P. 145. YUMA WATER ASSN. v. SCHLECHT. 139 138 Opinion of the Court. 5. A contract between the Government and a water-users’ association provided for payment of the first instalment of charges at the time of completion of proposed works, and reserved the right of the Secretary of the Interior to make such changes of the plans “ as further investigations and circumstances ” might “ dictate to be requisite for the public welfare ”. Held, that the works were not to be deemed incomplete either (a) because a small part of the drainage system was unfinished, the effectiveness of the system not being thereby detracted from, or (b) because two of three tracts which the Government undertook to reclaim were eliminated by the Secretary, in the exercise of his discretion, greater areas having been substituted which more than counterbalanced any injury that otherwise might have resulted to complaining water-users in the matter of increased assessments. P. 146. 6. Concurrent findings of fact of the District Court and the Circuit Court of Appeals, sustaining a determination of the Secretary of the Interior that reclamation works had been completed when public notice was given under § 4 of the Reclamation Act, must be accepted by this Court, in absence of clear error. P. 146. 275 Fed. 885, affirmed. Appeal from a decree of the Circuit Court of Appeals affirming a decree of the District Court, which dismissed, upon the merits, a suit to restrain officials of the Reclamation Service from taking steps toward the enforcement of charges for construction cost, under the Reclamation Act. Mr. Thomas D. Molloy for appellants. Mr. Assistant Attorney General Riter, with whom Mr. Solicitor General Beck was on the brief, for appellees. Mr. Justice Sutherland delivered the opinion of the Court. The Yuma County Water Users’ Association is a corporation organized primarily to represent the settlers on the Yuma Irrigation Project in Arizona in their dealings with the Government. The other appellants are shareholders and owners of tracts of land under the project. 140 OCTOBER TERM, 1922. Opinion of the Court. 262U.S. On April 8, 1904, the Secretary of the Interior received the report of a board of consulting engineers, made at his request, giving alternative estimates of the cost of the project, and recommending that $3,000,000 be set aside for construction. This report was followed by a letter from the Director of the Geological Survey, joining in the recommendation and, among other things, saying: “ In general the reports indicate that by means of construction of a dam across Colorado River and other works, it will be possible to reclaim upwards of 85,000 acres of land at a cost of less than $40 per acre. . . . “ The land is extremely fertile in character, the climate is somewhat tropical, and the products have such value per acre that it is believed that the cost of $40 per acre is not prohibitive. “ There are a large number of alternatives to be considered and difficult problems to be solved, but the matter has developed from the engineering side to a point where it is possible to consider the larger features and to set aside provisionally a sufficient sum of money to carry out the work contingent upon satisfactory arrangements being made with the owners of lands and vested rights and the complete solution of other matters now pending.” The Secretary, on May 10, 1904, replied approving the recommendation. Correspondence ensued between the Water Users’ Association and the officials of the Reclamation Service, and on May 28, 1904, a meeting between them was had. It does not seem necessary to give the details of this correspondence or of the meeting. It suffices to say that, throughout, the officials declared that in their opinion the project would cost at the rate of about $35 per acre, and the water users joined in the enterprise under that belief. True, it was stated that this sum might be increased or lessened as the work progressed and the opinion was otherwise qualified; but it was evidently thought that the cost would not depart YUMA WATER ASSN. v. SCHLECHT. 141 » 138 Opinion of the Court. from the figures given to any great extent one way or the other. Thereupon the land owners subscribed for shares in the association, binding themselves to pay the cost of the project in proportion to their interests and pledging their lands as security to that end. On May 31, 1906, the association, acting for its shareholders, entered into an agreement with the Government by which it was stipulated: that the Secretary should determine the number of acres capable of irrigation under the project; that payments should be divided into not less than ten equal annual installments, the first payable at the time of the completion of the works, or within a reasonable time thereafter and after due notice from the Secretary; and that the cost per acre should be equal throughout the district. And the association agrees “ that it will promptly collect or require prompt payment in such manner as the Secretary of the Interior may direct, and hereby guarantees the payments for that part of the cost of the irrigation works, which shall be apportioned by the Secretary of the Interior to its shareholders. . . .” The contract is silent as to the amount of the cost and nowhere suggests that it had already been fixed. It does not appear that a definite plan of construction was determined upon until after the meeting in 1904; the report of the engineers contains no estimate in respect of the works as they were finally constructed; and no construction contract was made until June, 1905. In the process of construction, great and unexpected difficulties were encountered. The contractors finding themselves unable to proceed, abandoned their contract and the Government was forced to take upon itself the burden of completing the work. The ultimate cost was more than double what had been anticipated. The project was finally completed, as found by both lower courts, on April 6, 1917, and on that date public notice was given 142 OCTOBER TERM, 1922. Opinion of the Court. 262U.S. by the Secretary, imposing upon the water users a construction charge of $75 per acre. This notice complies with the provisions of § 4 of the Reclamation Act, 32 Stat. 388, 389, c. 1093, printed in the margin.1 Appellants (plaintiffs) brought suit in the United States District Court for the District of Arizona to enjoin the defendants, who were officials of the Reclamation Service, from putting into operation the determination of the Secretary so as to exact a greater sum than $35.28 per acre. The court, after a trial, found in favor of the Government and dismissed the bill and its action was affirmed by the Court of Appeals (275 Fed. 885), from whose decree the case comes here by appeal. The pleadings are voluminous, much testimony was taken at the trial and a large number of errors have been assigned. After eliminating from consideration those matters which are clearly immaterial or without merit, two questions remain. They are: 1 “ Sec. 4. That upon the determination by the Secretary of the Interior that any irrigation project is practicable, he may cause to be let contracts for the construction of the same, in such portions or sections as it may be practicable to construct and complete as parts of the whole project, providing the necessary funds for such portions or sections are available in the reclamation fund, and thereupon he shall give public notice of the lands irrigable under such project, and limit of area per entry, which limit shall represent the acreage which, in the opinion of the Secretary, may be reasonably required for the support of a family upon the lands in question; also of the charges which shall be made per acre upon the said entries, and upon lands in private ownership which may be irrigated by the waters of the said irrigation project, and the number of annual installments, not exceeding ten, in which such charges shall be paid and the time when such payments shall commence. The said charges shall be determined with a view of returning to the reclamation fund the estimated cost of construction of the project, and shall be apportioned equitably: Provided, That in all construction work eight hours shall constitute a day’s work, and no Mongolian labor shall be employed thereon.” YUMA WATER ASSN. v. SCHLECHT. 143 138 Opinion of the Court. (1) Whether the report, correspondence and statements made in 1904 constituted an estimate of the cost of the project and a public notice, under the terms of § 4; and, if not, whether the notice of 1917 may be so regarded? (2) Whether the project was completed on April 6, 1917, within the meaning of the contract of 1906? First. It is contended by appellants that the report of the engineers, the correspondence among the officials and with the Water Users’ Association and the statements made at the meeting in 1904, taken together, constitute an estimate' of cost binding on the Government, and, though informal, a compliance with § 4 as to public notice. That it was the firm belief of the government officials that the cost of the project would not greatly, if at all, exceed $35 an acre, and that their opinion to that effect was given to the Water Users’ Association, by the documents and statements referred to, does not admit of doubt. It seems clear that the water users relied upon these expressions of opinion, and it may be assumed that if they had known in the beginning that the cost was to be as much as $75 per acre they would not have gone forward with the enterprise. But however confidently these opinions were expressed and however much they may have influenced the water users, the attendant circumstances, the language employed and the statutory requirements all preclude the idea that they constituted an estimate of the cost as contemplated by the statute. No element of fraud or bad faith is shown or suggested. The Reclamation Act sets aside all money received from the sale and disposal of public lands in certain States and Territories named for the reclamation of the arid lands therein; and this fund is to be kept intact as nearly as possible by collecting from the water users under each project the estimated cost of the construction thereof. See Swigart v. Baker, 229 U. S. 187, 197. The extent to which the fund will be preserved, obviously, will depend 144 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. upon the accuracy of the estimate, and this in turn, will depend upon the care exercised in securing information upon which to base it. Investigation as to the feasibility of any project, opinions of experts and collection of data relating to the question of cost must precede such an estimate, and § 4, moreover, requires that the charges against water users shall not be assessed until after construction contracts shall have been made, the evident purpose being to put the Secretary in possession of the data furnished by the contracts themselves before he acts in that respect. Prior to the making of the construction contracts, opinions expressed By engineers or officials may be estimates in one sense, but they are tentative and preliminary and cannot be regarded as constituting the required statutory estimate, though contributing to the basic facts upon which it is made. See Payette-Boise Water Users’ Ass’n. n. Cole, 263 Fed. 734, 738-739. The statute contemplates a precise and formal public notice which must state the lands irrigable under the project, the limit of area for each entry, the charges to be made per acre, the number of annual installments and the time when the payments shall commence. The opinions, correspondence and statements relied upon do not fulfill the statutory requirements and we must hold that the Government is neither bound nor estopped by them. Utah Power & Light Co. v. United States, 243 U. S. 389, 408-409; Pine River Logging Co. v. United States, 186 U. S. 279, 291; Whiteside v. United States, 93 U. S. 247, 256-257; The Floyd Acceptances, 7 Wall. 666, 676; Filor n. United States, 9 Wall. 45, 49; Hart v. United States, 95 U. S. 316; Lee v. Munro, 7 Cranch, 366. Moreover, the contract of 1906, made subsequently, expressly provides for payment on the part of the water users “ for that part of the cost of the irrigation works which shall be apportioned by the Secretary of the Interior to its shareholders.” Plainly this looked forward to YUMA WATER ASSN. v. SCHLECHT. 145 138 Opinion of the Court. future action on his part and did not rest upon any action already taken. Following the provisions requiring the Secretary to determine the practicability of the project and to make construction contracts the words are a and thereupon he shall give public notice,” etc. The word “ thereupon ” is construed by appellants as an adverb of time, meaning immediately thereafter. But this is only one of its uses. It is employed more frequently to express the relation of cause or of condition precedent. It is in the latter sense that it is used here, and its meaning is that the determination as to the practicability of the project and the making of contracts are precedent conditions to the estimate of cost and public notice. See Porphyry Paving Co. N. Ancker, 104 Cal. 340, 342. The notice must follow the coming into existence of the conditions. The time thereafter within which it shall be given is left, and from the nature of the matter must be left, to the discretion of the Secretary, and whether that discretion has been unreasonably exercised will depend upon the circumstances of each case. Here it is made plain that performance of the con-. struction contract became impossible and the same was abandoned. Acting upon its judgment, which so far as the record shows was not unreasonable, the Government then itself undertook the completion of the work. Physical conditions not originally foreseen were encountered, presenting difficulties and requiring increased expenditures of great magnitude. It does not appear that these expenditures were made unnecessarily or improvidently; nor is there anything in the record to indicate that the work was not done with reasonable expedition. The uncertainties arising from the newly discovered conditions, the abandonment of the construction work by the contractors, the changes which were necessitated in the original plans, and the unexpected turn of events in other respects, left the question of cost in such doubt as to justify withholding 51826°—23-------10 146 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. the public notice until it could rest on more definite information. The delay, it is true, was long continued but, under all the circumstances, we cannot say as a matter of law, that it was undue or that the Secretary’s discretion in respect of the time was unreasonably exercised. Second. The contract of May 31, 1906, provides that the first installment shall be payable at the time of the completion of the proposed works, and appellants contend that in two respects they were not completed on April 6, 1917, when the public notice was given: (1) that complete drainage for one of the tracts was not provided, and (2) that only one of three tracts which the Government promised to reclaim was reclaimed. As to the first point, it is sufficient to say that the testimony shows that the contemplated drainage was substantially completed, and fails to show that the small portion left undone detracted in any way from the effectiveness of the system. As to the second point, the original plans disclose that it was the intention to reclaim the three tracts mentioned, but the Secretary reserved the right to make such changes “ as further investigations and circumstances may dictate to be requisite for the public welfare.” The elimination, therefore, of the two tracts was within his discretion. Moreover, while these tracts were not reclaimed, other lands of greater area were added to the project which much more than counterbalanced any injury to the water users here concerned that might otherwise have resulted from the omission. The Secretary determined that the project had been completed when the public notice was given and both lower courts concurred in the same finding. These findings will be accepted here in the absence of clear error, which the record before us does not show. Bodkin v. Edwards, 255 U. S. 221; Brewer-Elliott Oil & Gas Co. v. United States, 260 U. S. 77. The decree of the Court of Appeals is Affirmed. DIER v. BANTON. 147 Argument for Appellants. DIER ET AL., INDIVIDUALLY AND AS COPARTNERS UNDER THE FIRM NAME OF E. D. DIER & COMPANY, ET AL., v. BANTON, DISTRICT ATTORNEY OF THE COUNTY OF NEW YORK, ET AL. APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK. No. 330. Argued April 17, 1923.—Decided May 7, 1923. 1. One who has been adjudged an involuntary bankrupt and has complied with an order requiring him to turn over his books and papers to a receiver is not privileged by the Fourth and Fifth Amendments to prevent their production by the receiver before a grand jury in a state court upon the ground that he might thus be incriminated. P. 149. 2. Books and papers in the possession of a receiver in bankruptcy appointed by a federal court cannot be taken by a subpoena issuing from a state court, unless the federal court, exercising its discretion with due regard for comity, shall consent. P. 151. 279 Fed. 274, affirmed. Appeal from an order of the District Court discharging a rule nisi and refusing to enjoin the production of books and papers, in the custody of its receiver in bankruptcy, before a grand jury in a state court. Mr. Nash Rockwood for appellants. It will be noted that.the petition in bankruptcy was an involuntary proceeding instituted by creditors, and that when the receiver, upon appointment, took possession of the books, records and documents of the alleged bankrupts, he did so wholly under the specific order of the court. This was not such a delivery of the books by the bankrupts as constituted a waiver of their constitutional rights. If they had interfered with the receiver in obtaining possession of the books, it would have been a contempt of court. The order of the court, which was wholly ex parte, did not in any way protect or seek to 148 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. protect the constitutional privileges of the alleged bankrupts. In this respect the order differed materially from the order of the District Court in Matter of Harris, 221 U. S. 274. A trustee under the Bankruptcy Act has title, whereas a receiver is only an arm of the court, to hold possession without title, and his possession is the possession of the bankrupts. In re Hess, 134 Fed. 109. See Counselman v. Hitchcock, 142 U. S. 547; Brown v. Walker, 161 U. S. 591; Ensign n. Pennsylvania, 227 U. S. 592. The bankrupts’ objection to the use of the books in the criminal prosecution by the District Attorney of New York County was made in due time. Let us assume that the petition in bankruptcy had been dismissed, then the bankrupts would again have been entitled to possession of their books. Could it be held that, because the books had temporarily passed into the legal possession of the receiver, their constitutional rights with reference to criminal proceedings had been waived? Johnson n. United States, 228 U. S. 457; Boyd v. United States, 116 U. S. 616; Weeks v. United States, 232 U. S. 383; Flagg v. United States, 233 Fed. 481; Silverthorne Lumber Co. v. United States, 251 U. S. 385; Amos v. United States, 255 U. S. 313. The order is appealable to this Court. Mr. Joab H. Banton and Mr. John Caldwell Myers appeared for Banton, District Attorney, appellee. Mr. Saul S. Myers, Mr. Walter H. Pollak and Mr. William J. Hughes appeared for Ehrich, Trustee in Bankruptcy, appellee. Mr. Chief Justice Taft delivered the opinion of the Court. This appeal is from an order of the District Court for the Southern District of New York discharging a rule nisi and DIER v. BANTON. 149 147 Opinion of the Court. refusing an injunction. On January 14, 1922, a petition in involuntary bankruptcy was filed against Elmore D. Dier and others, partners, as E. D. Dier & Company. Two days after the filing of the petition, Manfred W. Ehrich was appointed Receiver of the estate of the alleged bankrupts, and they and their servants were directed to turn over all their property, assets, account books and records and were restrained from suing out of any other court any process to impound or take possession of them. This order was complied with and the Receiver took possession of the books and papers of the alleged bankrupts and of the firm. On February 16th, Dier informed the court that the District Attorney of New York County had applied to the Receiver for the production of these books and papers before the Grand Jury, and asked for the rule nisi against the Receiver and the District Attorney, and upon a hearing thereof an injunction to prevent the use of such books and papers against him before the Grand Jury, on the ground that they would incriminate him and that his right to refuse to testify against himself under the Fourth and Fifth Amendments would thus be violated by the process of the Federal District Court. Judge Learned Hand, sitting in bankruptcy, discharged the rule and refused to enjoin the proposed use of the books. Judge Hand’s action was based on the ruling of this Court in Johnson v. United States, 228 U. S. 457. He quoted the language used in the Johnson Case, “A party is privileged from producing the evidence but not from its production.” He alluded to the circumstance that in the Johnson Case there were both title and possession in the Trustee, whereas in this case, the books and papers were in the hands of the Receiver who has no title but that, he said, made no difference. We agree with this view and hold that the right of the alleged bankrupt to protest against the use of his books and papers relating to his business as evidence against him ceases as soon as his pos- 150 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. session and control over them pass from him by the order directing their delivery into the hands of the Receiver and into the custody of the court. This change of possession and control is for the purpose of properly carrying on the investigation into the affairs of the alleged bankrupt and the preservation of his assets pending such investigation, the adjudication of bankruptcy vel non, and if bankruptcy is adjudged, the proper distribution of the estate. It may be that the allegation of bankruptcy will not be sustained, and in that case, the alleged bankrupt will be entitled to a return of his property including his books and papers; and when they are returned, he may refuse to produce them and stand on his constitutional rights. But while they are, in the due course of the bankruptcy proceedings, taken out of his possession and control, his immunity from producing them, secured him under the Fourth and Fifth Amendments, does not enure to his protection. He has lost any right to object to their use as evidence because, not for purpose of evidence, but in the due investigation of his alleged bankruptcy and the preservation of his estate pending such investigation, the control and possession of his books and papers relating to his business were lawfully taken from him. ... It is pressed upon us that the bankrupt may prevent the use of such books and papers taken over by a receiver in the bankruptcy proceedings for evidence in a criminal case in the state court by resisting surrender and protesting against their use for such a purpose at the time the Receiver took possession. But we think the alleged bankrupt has no such right. We so held in Ex parte Fuller, ante, 91, in which it was sought to attach conditions of this kind to the turning over of the books and papers of a bankrupt to the Trustee in Bankruptcy. We are of opinion that the same principle must apply to the delivery of the books and papers relating to the bankrupt’s business and property included in the estate into the custody of the Receiver of the Bankruptcy Court. ESSGEE CO. v. UNITED STATES. 151 147 Syllabus. Of course, where such books and papers are in the custody of the Bankruptcy Court, they can not be taken therefrom by subpoena of a state court except upon consent of the federal court. In granting or withholding that consent the latter exercises a judicial discretion dependent on the circumstances, and having due regard to the comity which should be observed toward state courts exercising jurisdiction within the same territory. Ponzi v. Fessenden, 258 U. S. 254, 259. All we hold here is that the court below having exercised discretion to allow the use of the books and papers in the custody of its officer upon subpoena by another.court, the alleged bankrupt’s rights under the Fourth and Fifth Amendments have not been violated. Order affirmed. ESSGEE COMPANY OF CHINA ET AL. v. UNITED STATES. HANCLAIRE TRADING CORPORATION ET AL. v. UNITED STATES. ERROR TO AND APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK. Nos. 706 and 707. Submitted April 25, 1923.—Decided May 7, 1923. 1. Review of orders of the District Court in special proceedings in which no jury can intervene is by appeal, and not by writ of error. P. 152. 2. In view of provisions of the Act of September 6, 1916, rendering mistakes in proceeding by writ of error instead of appeal, or vice versa, immaterial from the standpoint of jurisdiction, the practice of adopting both methods through abundant caution is- discouraged. Id. 3. A corporation is not protected by the Fourth and Fifth Amendments from producing its books and records before a federal grand jury engaged in investigating its conduct in relation to the federal criminal laws. P. 155. 152 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. 4. The lawful effect of a subpoena duces tecum addressed to a corporation is not disturbed by failure to put its officers who produce the papers on the stand. P. 157. 5. A claim of irregularity in not calling such officers before the grand jury, held, to have been waived by their conduct. Id. 6. An officer of a corporation having custody of its books and papers can not object to producing them upon the ground that they may disclose his own guilt. P. 158. Affirmed. Review of orders of the District Court denying petitions for the return of books and papers produced under a subpoena duces tecum. Mr. W. M. K. Olcott and Mr. A. A. Silberberg for plaintiffs in error and appellants. Mr. Solicitor General Beck, Mr. Assistant Attorney General Crim, Mr. Clifford H. Byrnes, Special Assistant to the Attorney General, and Mr. Francis A. McGurk for the United States. Mr. Chief Justice Taft delivered the opinion of the Court. These are appeals and writs of error to review the 'action of the District Court in denying petitions of the two companies, the Essgee Company of China and the Hanclaire Trading Corporation, praying that the books and papers produced by an officer of the two companies, in response to a duces tecum issued to them by order of the Federal Grand Jury, be returned to the petitioners, on the ground that the process issued and the detention of the books by the Government were and are in violation of their rights under the Fourth and Fifth Amendments to the Federal Constitution. Both appeals and writs of error were allowed in these cases. This was unnecessary. The review sought is of an order of the District Court in a special proceeding in ESSGEE CO. v. UNITED STATES. 153 151 Opinion of the Court. which no jury can intervene. It likens itself in its appellate character to a review of cases in equity or in admiralty or of an order upon a writ of habeas corpus in which issues of facts are triable to the court, and in which the review may properly involve a reexamination by the reviewing court of the whole record and of the findings of the court upon both the law and the evidence therein. Since the passage of the Act of September 6, 1916, entitled “An Act To amend the Judicial Code ” (39 Stat. 726, c. 448, § 4), which provides that no court having power to review a judgment or decree passed by another shall dismiss a writ of error solely because an appeal should have been taken, or dismiss an appeal because a writ should have been sued out, but that when such mistake or error occurs, it shall disregard the same and take the action which would be appropriate if the proper appellate procedure had been followed, the distinction is not important from: the standpoint of the jurisdiction of this Court. In the interest, however, of orderly procedure, economy in time of both courts, and in the making up and printing of the record, counsel should make every effort to select the proper procedure in review and not duplicate methods out of an abundant caution which the Act of 1916 makes unnecessary. The Hanclaire Trading Corporation and the Essgee Company of China were organized under the laws of New York and were doing an importing business in New York City. Schratter was an officer in both companies and Kramer was an officer of one and attorney for both. The Federal Grand Jury in the Southern District of New York was investigating charges of frauds in importations by these two companies whose interests and transactions were intermingled. On October 14, 1921, a subpoena duces tecum was served upon each of the corporations by personal service upon Schratter as a chief officer thereof. Schratter then directed Kramer to gather together the 154 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. books and papers called for and produce them at the Federal Court House. The subpoena was served by the U. S. Marshal for the District. He was accompanied by three other Government officials, who, it was charged, without authority examined and took away to the Court House other books and papers not included in the list set forth in the duces tecum. This incident was made an issue in-the affidavits; but it is evident from reading the record and the admission of counsel that we are not concerned with any such records and papers, but only with those which were produced by Kramer for the two companies in response to the duces tecum. Schratter in his affidavit and petition claims that under the subpoena some papers belonging to him individually were taken, but an examination of the list of records and papers produced, shows that the only personal paper produced by Kramer was the personal tax return of Schratter, which he does not assert was in any way relevant to the charges, or in any degree incriminating as to him. Kramer and Schratter brought the records and papers called for by the subpoena to a room in the Court House and deposited them on a table where the District Attorney found them and took charge of them. Neither Schratter nor Kramer was then called before the Grand Jury, but they were both at once arrested upon warrants for violation of the importing laws. They testified that they did not see the District Attorney when he took the records and papers and that Kramer demanded a return of them and protested against their detention. Evidence to the contrary is offered by the Government witnesses, but we do not regard the issue as material. The next day, October 15, 1921, Schratter appeared before Judge Knox and applied for permission to go abroad in order to attend to business of vital personal importance. Schratter remained abroad until June, 1922, and on the 9th of that month appeared to plead to an indictment ESSGEE CO. v. UNITED STATES. 155 151 Opinion of the Court. which had in the meantime been found against the two corporations and himself. Meantime, Kramer, after much solicitation on his part, was given an opportunity to testify to the Grand Jury and to present to them other records and papers which he voluntarily produced. He was not indicted. After Schratter’s return and Kramer’s escape from indictment, the two corporations and Schrat-ter filed the petition, denial of which by the District Court is now before us for review. The books and papers brought before the Grand Jury and the court in this case were the books, records and papers of corporations of the State of New York. Such corporations do not enjoy the same immunity that individuals have, under the Fourth and Fifth Amendments, from being compelled by due and lawful process to produce them for examination by the state or Federal Government. Referring to the books and papers of a corporation, Mr. Justice Hughes speaking for this Court in TF17-son v. United States, 221 U. S. 361, 382, said: “ They have reference to business transacted for the benefit of the group of individuals whose association has the advantage of corporate organization. But the corporate form of business activity, with its charter privileges, raises a distinction when the authority of government demands the examination of books. That demand, expressed in lawful process, confining its requirements within the limits which reason imposes in the circumstances of the case, the corporation has no privilege to refuse. It cannot resist production upon the ground of self-incrimination. Although the object of the inquiry may be to detect the abuses it has committed, to discover its violations of law and to inflict punishment by forfeiture of franchises or otherwise; it must submit its books and papers to duly constituted authority when demand is suitably made. This is involved in the reservation of the visitatorial power of the State, and in the 156 OCTOBER TERM, 1922. Opinion of the Court. 262U.S. authority of the National Government where the corporate activities are in the domain subject to the powers of Congress.” Hale v. Henkel, 201 U. S. 43, and Wheeler v. United States, 226 U. S. 478, are to the same point. Counsel for appellants rely upon Silverthorne Lumber Co. v. United States, 251 U. S. 385, but it has no application to the case before us. The Silverthorne Case was a writ of error to reverse a judgment for contempt against a corporation for refusal to obey an order of the court to produce books and documents of the company to be used to show violation of law by the officers of the company. This Court found that without a shadow of authority and under color of an invalid writ, the marshal and other government officers had made a clean sweep of all the books, papers and documents in the office of the company while its officers were under arrest. These documents were copied and photographed and then the court ordered their return to the company. A subpoena was then issued to compel the production of the originals. The company refused to obey the subpoena. The court made an order requiring obedience and refusal to obey the order was the contempt alleged. This Court held that the Government could not, while in form repudiating the illegal seizure, maintain its right to avail itself of the knowledge obtained by that means which otherwise it would not have had. In other words, we.held that the search thus made was an unreasonable one against which the corporation was protected by the Fourth Amendment and which vitiated all the subsequent proceedings to compel production. There was nothing inconsistent with the Wilson Case in this ruling for, as we have seen in the passage quoted from the opinion in that case, a corporation can only be compelled to produce its records against itself by the demand of the Government expressed in lawful process, confining its requirements within limits which reason imposes in the circumstances of the case. It is to submit its books and ESSGEE CO. v. UNITED STATES. 157 151 Opinion of the Court. papers only to “ duly constituted authority when demand is suitably made.” In the case before us the demand was suitably made by duly constituted authority. In the Silverthorne Case, it was not. Here it was expressed in lawful process, confining its requirements to certain described documents and papers easily distinguished and clearly described. Their relevancy to the subject of investigation was not denied. As said in the Wilson Case (p. 376): “ But there is no unreasonable search and seizure, when a writ, suitably specific and properly limited in its scope, calls for the production of documents which, as against their lawful owner to whom the writ is directed, the party procuring its issuance is entitled to have produced.” Objection is made that neither Kramer nor Schratter was called before the Grand Jury when they produced the books and papers in response to the duces tecum. That was not necessary. The subpoena only summoned the corporations to appear and produce the named documents and papers. There was no real ad testificandum clause in the subpoena because a corporation could not testify. It was expressly ruled in the Wilson Case, that the failure to put officers of the corporation on the stand in such a case did not in any way invalidate or destroy the lawful effect of the duces tecum. Kramer says that he protested against the retention of the documents he had produced at the time because he was not called before the Grand Jury. At his own solicitation he was thereafter called before that body and testified and voluntarily produced other documents and papers, and never renewed his demand for the documents produced under subpoena until after the Grand Jury ignored the charge against him some eight months later. Schratter against the opposition of the District Attorney but with the consent of the court absented himself from the country for eight months and took no steps in respect to the produced documents and papers. Judge Knox 158 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. held that such conduct constituted a waiver of any irregularities in not calling these witnesses before the Grand Jury when the documents and papers were produced. If a waiver were needed, as we do not think it was under the Wilson Case, this clearly would have been sufficient. Schratter joined with each corporation in asking a return of the documents and papers of that corporation on the ground that they might incriminate him. But the cases of Hale v. Henkel, 201 U. S. 43; Wilson v. United States, 221 U. S. 361, and Wheeler v. United States, 226 U. S. 478, show clearly that an officer of a corporation in whose custody are its books and papers is given no right to object to the production of the corporate records because they may disclose his guilt. He does not hold them in his private capacity and is not, therefore, protected against their production or against a writ requiring him as agent of the corporation to produce them. Appellants cite the cases of Boyd v. United States, 116 U. S. 616; Weeks v. United States, 232 U. S. 383, and Gouled v. United States, 255 U. S. 298, to support their contention that the proceedings complained of herein violate their rights under the Fourth and Fifth Amendments. Those cases were all unreasonable searches of documents and records belonging to individuals. The distinction between the cases before us and those cases lies in the more limited application of the Amendments to the compulsory production of. corporate documents and papers as shown in the Henkel, Wilson and Wheeler Cases. The order of the District Court is affirmed. MAGNUM CO. v. COTY. 159 Syllabus. MAGNUM IMPORT COMPANY, INC., v. COTY. COHN, TRADING AS MACLEN IMPORT COMPANY, v. COTY. BAUM ET AL., TRADING AS BEAUTEX COMPANY, v. COTY. IVORY NOVELTIES TRADING COMPANY, INC., v. COTY. MAGNUM IMPORT COMPANY, INC., v. HOUBI-GANT, INC. PETITIONS FOR ORDERS, PENDING APPLICATIONS FOR CERTIORARI, SUSPENDING DECREES OF THE CIRCUIT COURT OF APPEALS FOR THE SECOND CIRCUIT. Nos. 978, 979, 980, 982, 981. Argued on return to rule to show cause April 16, 17, 1923.—Decided May 7, 1923. 1. Under Jud. Code, § 262, this Court has power to suspend or modify an interlocutory or final decree of the Circuit Court of Appeals, which is reviewable under § 240 by certiorari, pending the disposition of a petition filed here for the issuance of that writ. P. 162. 2. The jurisdiction to bring up cases from the Circuit Court of Appeals by certiorari was given for the two purposes of securing uniformity of decision in the circuits and of having questions of importance decided by this Court when desirable in the public interest,—not for the purpose of giving the defeated party another hearing. P. 163. 3. An application to suspend a judgment of the Circuit Court of Appeals, pending disposition of a petition for certiorari here, should be first made to that court, which is free to determine it upon its own view of the likelihood of a certiorari being granted and of the balance of convenience.. P. 163. 4. If the application be refused by that court, a stay will be granted here, pending the application for certiorari, only upon an extraordinary showing, and, even after certiorari has been granted, only in a clear case and upon a decided balance of convenience. P. 164. Petitions denied. 160 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. Applications for orders to suspend interlocutory decrees of the Circuit Court of Appeals pending petitions for certiorari. Mr. Charles H. Tuttle, with whom Mr. Isaac Reiss and Mr. William J. Hughes were on the briefs, for petitioners. Mr. Asher Blum, with whom Mr. Hugo Mock was on the briefs, for Coty, respondent. Mr. George 8. Hornblower, with whom Mr. Lindley M. Garrison and Mr. Raoul E. Desvernine were on the brief, for Houbigant, Inc., respondent. Mr. Chief Justice Taft delivered the opinion of the Court. All these cases involve the question how far the purchasers of perfumes made by manufacturers whose perfumes have gained a high reputation with the public may use the name and trade-mark of such manufacturers in rebottling or repacking and selling them when, as claimed by the manufacturers and owners of the trade-mark, the process of rebottling and repacking injures the perfumes and impairs the value of the trade-mark and the reputation of the manufacturers. In a case presenting a similar question, to wit, Prestonettes, Inc. v. Coty, 260 U. S. 720, this Court granted a writ of certiorari, and applications in the above entitled cases are now pending. They are also before us on petitions praying that this Court issue orders suspending the operation of the decrees of the Circuit Court of Appeals and that, pending the applications for certiorari in this Court, we restore the temporary injunctions of the District Court which the Circuit Court of Appeals enlarged. The District Court found that the defendants in all these cases were infringing the rights of the complainants in their trade-marks and the use of their trade names, MAGNUM CO. v. COTY. 161 159 Opinion of the Court. but thought it sufficient to permit the defendants to continue their rebottling and repacking of complainants’ perfumes and powders if in the form in which resold, the bottles or boxes bore a legend reciting all the facts and not giving any more prominence to the fact that these were complainants’ perfumes or powders than to the fact that they had been rebottled and repacked by defendants. The Circuit Court of Appeals found that such rebottling and repacking as done by defendants so impaired the delicate odors and qualities of the perfumes and powders that it unlawfully injured the right of the complainants in their trade-marks and business, that such rebottling and repacking and resale with the use of the original manufacturer’s trade-mark and name were a violation of a criminal statute of the State of New York, that the proposed inspection of defendants’ rebottling and repacking with a view to preserving the excellence of the perfumes and powders would entail such expense and burden upon complainants as to be impracticable, and that the only complete and satisfactory remedy to which complainants were entitled was an injunction against the use of the complainants* trade-marks or names upon the rebottled or repacked articles for sale, and the temporary injunctions granted by the District Court were accordingly modified and the case was remanded to the District Court for final hearing. Applications were then made to the Circuit Court of Appeals to stay the mandate and to grant an application upon proper bond to suspend its modification of the District Court’s orders until applications for certiorari and motions for a suspending order could be made to this Court. After full consideration, these motions were denied by the Circuit Court of Appeals, its mandate has gone down and the injunctions as enlarged by it are now in force. Meantime these applications for certiorari have been made here, and in ad-518260—23-----11 162 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. vance of our consideration of them in due course, motions for the suspension of the orders of the Circuit Court of Appeals have been presented to us on affidavits and heard, and are now to be decided. It is objected for Houbigant, Inc., one of the respondents in these petitions for certiorari, that this Court has no jurisdiction to suspend the operation of the order or decree of the Circuit Court of Appeals pending a petition for certiorari and before it is granted. The cases of In re Massachusetts, 197 U. S. 482, In re Glaser, 198 U. S. 171, and McIntire v. Wood, 7 Cranch, 504, are cited to this point. They are wholly without application. The first two were cases pending in inferior courts which, under the Constitution and the statutes of the United States, could never, by any possibility, come within the jurisdiction of this Court. The third case was one of an application to a Circuit Court for the issuing of a mandamus to the register of the land office to compel him to issue a final certificate of purchase of land to the relator. This Court found that, under the statute, the Circuit Court was not given original power to issue a mandamus in such a case when not necessary or ancillary to the exercise of its jurisdiction otherwise conferred. 'Under § 262 of the Judicial Code this Court is given power to issue all writs not specifically provided for by statute which may be necessary for the exercise of its jurisdiction, and agreeable to the usages and principles of law. Here the jurisdiction of this Court to grant the application for certiorari already made and pending is conferred by § 240 of the Judicial Code. That section provides that in any case, civil or criminal, in which the judgment or decree of the Circuit Court of Appeals is made final, it shall be competent for this Court by certiorari upon the petition of a party thereto to bring the case here for review as if it had come by error or appeal. By § 128 of the Judicial Code, as amended by the Act of MAGNUM CO. v. COTY. 163 159 Opinion of the Court. Jan. 28, 1915, c. 22, § 2, 38 Stat. 803, the judgment or decree of the Circuit Courts of Appeals is made final in trade-mark cases. Hence, if in its discretion, this Court conceives that upon the showing made it should order the suspension or modification of a judgment or decree of the Circuit Court of Appeals, interlocutory or final, to preserve or secure a status of the case for the full and satisfactory exercise of its reviewing power over it, it may make the necessary order of suspension or modification upon such terms as seem equitable upon the filing of the petition for certiorari and pending its disposition. So much on the question of the power. The question how the Court should exercise this power next arises. The jurisdiction to bring up cases by certiorari from the Circuit Courts of Appeals was given for two purposes, first to secure uniformity of decision between those courts in the nine circuits, and second, to bring up cases involving questions of importance which it is in the public interest to have decided by this Court of last resort. The jurisdiction was not conferred upon this Court merely to give the defeated party in the Circuit Court of Appeals another hearing. Our experience shows that eighty per cent, of those who petition for certiorari do not appreciate these necessary limitations upon our issue of the writ. When, therefore, after the petition is filed and before its submission, an application is made for a suspension of the judgment or decree of the Circuit Court of Appeals, a heavy burden rests on the applicant. The petition should, in the first instance, be made to the Circuit Court of Appeals which with its complete knowledge of the cases may with full consideration promptly pass on it. That court is in a position to judge first whether the case is one likely under our practice to be taken up by us on certiorari, and second, whether the balance of convenience requires a suspension of its decree and a withholding of its mandate. It involves no dis- 164 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. respect to this Court for the Circuit Court of Appeals to refuse to withhold its mandate or to suspend the operation of its judgment or decree pending application for certiorari to us. If it thinks a question involved should be ruled upon by this Court, it may certify it. If it does not certify, it may still consider that the case is one in which a certiorari may properly issue, and may in its discretion facilitate the application by withholding the mandate or suspending its decree. This is a matter however wholly within its discretion. If it refuses, this Court requires an extraordinary showing, before it will grant a stay of the decree below pending the application for a certiorari, and even after it has granted a certiorari, it requires a clear case and a decided balance of convenience before it will grant such stay. These remarks, of course, apply also to applications for certiorari to review judgments and decrees of the highest courts of States. Coming now to the circumstances presented on the inquiry before us, we find nothing to justify our granting the motion. It is clear that the Circuit Court of Appeals gave full consideration to a similar motion and with a much fuller knowledge than we can have, denied it. As we have said, we require very cogent reasons before we will disregard the deliberate action of that court in such a matter. We have read the affidavits and we do not find that the petitioners have, in the light of what we have said, made a case for the suspension of the order. On the contrary, the weight of the evidence is clearly with the respondents. The petitions are denied. UNITED STATES v. SISCHO. 165 Statement of the Case. UNITED STATES v. SISCHO. CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE NINTH CIRCUIT. No. 76. Reargued April 23, 1923.—Decided May 7, 1923. 1. The purpose of requiring a ship’s manifest is not merely the collection of duties but also to inform the Government whether forbidden things are being imported. P. 167» 2. Rev. Stats. § 2766, providing that “ the word ‘ merchandise,’ as used in this Title, may include goods, wares, and chattels of every description capable of being imported,” does not mean such only as are capable of being legally imported, or make that restriction upon the term as used in prior statutes. P. • 168. 3. The Act of January 17, 1914, which forbids the importation of smoking opium, and provides that wherever there shall be found on an incoming vessel opium, or its preparations or derivatives, not shown upon her manifest as provided by Rev: Stats. §§ 2806 and 2807, the vessel shall be Hable to the penalty and forfeiture prescribed by § 2809, intends that smoking opium must be included in the manifest, and shows that, from the date of the act at least, the definition of merchandise in Rev. Stats. § 2766, supra, must be taken as including forbidden opium. Id. 4. Rev. Stats., § 2809, providing that if any merchandise shall be brought into the United States in any vessel from a foreign port, which is not included or described in the manifest, the master shall be Hable to a penalty equal to the value of such merchandise, applies to smoking opium, the importation of which has been forbidden. Id. 5. The foreign value of such opium was properly taken for the purpose of measuring the penalty in this case. P. 169. 270 Fed. 958, reversed. Certiorari to a judgment of the Circuit Court of Appeals which affirmed a judgment of the District Court for the appellee in an action by the United States to recover a penalty.1 1 The case was first argued on October 10, 11, 1922, and, on October 16, 1922, the judgment was affirmed with costs by an equally divided court. 260 U. S. 697. On November 13, 1922, a petition for rehearing was granted and the cause restored to the docket for hearing before a full bench. 260 U. S. 701. 166 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. Mr. Alfred A. Wheat, Special Assistant to the Attorney General, with whom Mr. Solicitor General Beck was on the brief, for the United States. Mr. John M. Woolsey, with whom Mr. Cletus Keating and Mr. Harry D. Thirkield were on the brief, for respondent. Mr. Justice Holmes delivered the opinion of the Court. This is a suit brought by the United States to recover a penalty of $6,400 from the defendant for bringing into this country one hundred five-tael tins of opium prepared for smoking purposes without including the same in the ship’s manifest. The defendant was master of the vessel in which the opium was imported and was charged by the Collector of Customs with a liability for the above sum, that being the price paid by the defendant for the goods. By Rev. Stats. § 2809, “ If any merchandise is brought into the United States in any vessel whatever from any foreign port . . . which shall not be included or described in the manifest . . . the master shall be liable to a penalty equal to the value of such merchandise not included in such manifest; and all such merchandise not included in the manifest belonging or consigned to the master, mate, officers, or crew of such vessel, shall be forfeited.” The District Court, sitting without a jury, held that opium prepared for smoking purposes was not merchandise within the meaning of § 2809, and that being outlawed by the statutes it had no value; and gave judgment for the defendant. 262 Fed. 1001. The judgment was affirmed by the Circuit Court of Appeals, one Judge dissenting, on the former ground. 270 Fed. 958. A writ of certiorari was granted by this Court. 256 U. S. 688. It was stated below that the defendant had been convicted of smuggling; but the UNITED STATES v. SISCHO. 167 165 Opinion of the Court. record does not disclose the fact, if material, and nothing turns upon it. The points mentioned are the only ones to be discussed. The collection of duties is not the only purpose of a manifest, as is shown by the requirement of one for outward bound cargoes and from vessels in the coasting trade bound for a port in another collection district, Rev. Stats. §§ 4197, 3116, and more clearly by the plain reason of the thing. A Government wants to know, without being put to a search, what articles are brought into the country, and to make up its own mind not only what duties it will demand but whether it will allow the goods to enter at all. It would seem strange if it should except from the manifest demanded those things about which it has the greatest need to be informed—if in that one case it should take the chance of being able to find what it forbids to come in, without requiring the master to tell what he knows. It would seem doubly strange when at the same time it required any other person who had knowledge that the forbidden article was on the vessel to report the fact to the master. Act of January 17, 1914, c. 9, § 4, 38 Stat. 275, 276. It is not an answer to say that if the master knows that he has contraband goods on board he is subject to a penalty for that and probably will lie. The law naturally, one would think, would put the screws on to make him tell the truth, and in that way diminish the chance of his carrying contraband and help him to show his innocence if he has made a mistake. Harford v. United States, 8 Cranch, 109. We are of opinion that this policy, which has been expressed in terms in later statutes, (Act of May 26, 1922, c. 202, § 3, 42 Stat. 596, 598; Tariff Act of September 21, 1922, c. 356, 401(c), 431, 584, 42 Stat. 858, 948, 950, 980;) governs also in the statutes to be construed here. There is less contradiction between the requirement of the manifest and the prohibition of the import than there is between such a 168 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. prohibition and a tax. United States v. Stafoff, 260 U. S. 477. The main foundation of the decision below is Rev. Stats. § 2766: “The word ‘merchandise,’ as used in this Title [the Title including § 2809 upon which this suit is based,] may include goods, wares, and chattels of every description capable of being imported.” It is argued that this is a definition; that “ capable of being imported ” must be taken to mean capable of being imported lawfully as otherwise the phrase hardly would do more than exclude chattels real, and would want the poignant significance attributed to every word of legislation; and that therefore the merchandise to be included in the manifest does not embrace opium for smoking which the .law has done all it can to exclude. Act of January 17, 1914, c. 9, 38 Stat. 275. Yet this very Act of 1914 provides that whenever there shall be found upon a vessel arriving at any port of the United States opium “ or any preparations or' derivatives thereof ” “ which is not shown upon the vessel’s manifest, as is provided by. sections twenty-eight hundred and six and twenty-eight hundred and seven of the Revised Statutes, such vessel shall be liable for the penalty and forfeiture prescribed in section twenty-eight hundred and nine of the Revised Statutes.” We see no adequate reason for not taking these words in their natural sense as including smoking opium and as meaning that it must be included in the manifest, or for limiting them to forfeiture of the vessel. We rather should read them as showing that, at least for the future and at least so far as derivatives from opium are concerned, the language quoted from Rev. Stats. § 2766, was also to be taken in its natural sense as meaning physically capable of being imported. The language under consideration was an insertion in the Revised Statutes. That volume was primarily a codification of the general statutes then in force and is UNITED STATES v. SISCHO. 169 165 Opinion of the Court. not lightly to be read as making a change, although of course it may do so. The words on their face indicate rather an extension than a restriction. “ May include ” seems to point to the removal of a doubt as to whether previously “ merchandise ” might include all that is mentioned. It is a most unnatural way of saying that henceforth it shall not include something that otherwise might have been included. To give it the latter meaning we have again to read “ capable of being imported ” in an artificial sense instead of taking the phrase simply for what it says to a plain mind. The only objection to reading it in the natural way is that it is thought to add nothing to what was contained in “ goods, wares, and chattels of every description.” But there is no canon against making explicit what is implied- and adding a little emphasis to the endeavors to make the proposition broad. The doubts that have been felt show that the endeavor was not very successful, but we believe that it was made. There can be little doubt that before the insertion of § 2766 goods that could not be imported lawfully were merchandise within the meaning of the statutes. It was held in Harjord v. United States, 8 Cranch, 109, that the unlading of such goods without a permit was an offence subjecting them to forfeiture, upon reasoning that applies to the requirement that they should be entered on the manifest, with equal force. What we have said sufficiently disposes of the suggestion that the requirement was repealed by the opium act that we have cited. That is merely saying in another way that a manifest is. not necessary for goods forbidden to enter the country. All that remains is the suggestion that smoking opium has no value. But assuming it to be established that the statutes require the manifest to disclose prohibited articles the penalty imposed implies that such articles may have value and does not require the Courts to set up a technical rule in face of the plain truth. 170 OCTOBER TERM, 1922. Counsel for Parties. 262 U. S. So the provision that smoking opium shall be forfeited implies that however evil it may be it has an owner. Act of January 17, 1914, c. 9, § 4, 38 Stat. 275. Act of May 26, 1922, c. 202, § 3, 42 Stat. 596, 598. In the circumstances we see no objection to taking the foreign value as evidence, in accordance with the rulings of the Treasury Department. Treas. Dec. No. 32083, December, 1911. 21 T. D. 687. Judgment reversed. BIANCHI ET AL. v. MORALES ET AL. APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR- PORTO RICO. No. 934. Motion to affirm or advance, and to vacate stay, submitted April 16, 1923.—Decided May 7,1923. 1. The court may affirm a decree dismissing a suit, without putting the parties to the expense of printing the full record, when the facts stated and admitted in the motion papers make it plain that the suit cannot be maintained. P. 171. 2. The law of Porto Rico providing for summary foreclosure of mortgages without allowing other defenses than payment, but leaving the mortgagor plenary opportunity to assert other objections by separate suit, clearly does not deprive him of property without due process of law. Id. Affirmed. Appeal from a decree of the District Court of the United States for Porto Rico, dismissing, for want of jurisdiction, a bill to restrain summary foreclosure proceedings. Mr. Phelan Beale and Mr. George W. Study for appellants- Mr. Carroll G. Walter for appellees. BIANCHI v. MORALES. 171 170 Opinion of the Court. Mr. Justice Holmes delivered the opinion of the Court. This is a bill in equity filed in the District Court to restrain proceedings under the Mortgage Law of Porto Rico to foreclose a mortgage. That law gives a summary suit in which, speaking broadly, no defence is open except payment, Mortgage Law Regulations, Art. 175, and it is contended that this deprives the plaintiffs, (appellants,) of their property without due process of law. The statutes give a separate action to annul the mortgage in which any defence to it may be set up, and also provide for a cautionary notice, Mortgage Law, Art. 42; Mortgage Law Regulations, Art. 91, which the Supreme Court of Porto Rico regards as a sufficient substitute for an injunction. American Trading Co. v. Monserrat, 18 P. R. 268. See Romeu v. Todd, 206 U. S. 358. The bill was dismissed by the District Court for want of jurisdiction. The appellees move that the decree be affirmed. The facts stated and admitted in the motion papers make it so plain that the bill cannot be maintained that we shall affirm the decree below without putting the parties to the expense of printing the full record. Apart from other matters urged by the appellees the constitutional objection is simply another form of the objection to the separation between possessory and petitory suits familiar to countries that inherit Roman law and not wholly unfamiliar in our own. The United States, the States, and equally Porto Rico, may exclude all claims of ultimate right from possessory actions, consistently with due process of law. Grant Timber & Manufacturing Co. v. Gray, 236 U. S. 133. Central Union Trust Co. v. Gar-van, 254 U. S. 554. Before these decisions it had been strongly intimated «by Chief Justice White that the foreclosure by summary process allowed by the law of Porto Rico was valid, Torres v. Lathrop, Luce & Co., 231 U. S. 171, 177, and a decision to the same effect was rendered by 172 OCTOBER TERM, 1922. Syllabus. 262II. S. the Supreme Court of the Island. Giménez v. Brenes, 10 P. R. 124. In view of these decisions we are of opinion that the constitutional question raised was only colorable and that the decree dismissing the bill was right. Decree affirmed. OLIVER IRON MINING COMPANY v. LORD ET AL. CLEVELAND-CLIFFS IRON COMPANY v. LORD ET AL. MESABA-CLIFFS IRON MINING COMPANY v. LORD ET AL. BENNETT MINING COMPANY ET AL. v. LORD ET AL. REPUBLIC IRON & STEEL COMPANY ET AL. v. LORD ET AL. BIWABIK MINING COMPANY ET AL. v. LORD ET AL. INTER-STATE IRON COMPANY v. LORD ET AL. APPEALS FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE DISTRICT OF MINNESOTA. Nos. 560-566. Argued December 6, 7, 1922.—Decided May 7, 1923. 1. The tax imposed by Laws of Minnesota, 1921, c. 223, on the business of mining iron ore, measured by a percentage of the value of the ore mined or produced, is an occupation tax. P. 176. 2. The mining of ore, even when substantially all of the ore mined is immediately and continuously loaded on cars and shipped into other States to satisfy existing contracts,—is not interstate commerce and is subject to local taxation. P. 177. 3. The facts that the Minnesota tax, supra, applies only to those engaged, as owners or lessees, in mining or producing ores on their own account, and not to those who do mining work for them OLIVER IRON CO. v. LORD. 173 172 Counsel for Parties. under contract and whose pay is part of the expenses of the business, and that it does not apply to owners or lessees who do development work but remove no ore,—do not bring it in conflict with the equal protection clause of the Fourteenth Amendment, or with § 1 of Art. 9 of the Minnesota Constitution, providing that taxes shall be uniform upon the same class of subjects. P. 179. 4. The question whether a provision of this Minnesota law allowing the amount of royalties paid on the ore mined and produced during the year to be deducted from the value of such ore before computing the tax, introduces an unconstitutional discrimination in favor of those who operate under leases and pay royalties and against owners who operate their own mines and pay no royalties, cannot be raised in this case, it appearing that all of the iron mines in the State are operated under such leases, except six which were not operated during the tax year in question and are not threatened with a tax for that or later years. P. 180. 5. A tax based on the value of ore mined and produced, after deducting royalties and major expenses of the business, cannot be adjudged arbitrary or unreasonably discriminatory merely because of lack of uniformity in royalties and expenses producing corresponding differences in the tax. P. 181. Affirmed. Appeals from decrees of the District Court dismissing, on their merits, as many suits, brought by the appellants to enjoin the enforcement of a state tax law. Mr. Cordenio A. Severance, with whom Mr. George W. Morgan and Mr. Frank D. Adams were on the brief, for appellant in No. 560. Mr. Henry J. Grannis, with whom Mr. William P. Belden was on the brief, for appellants in Nos. 561 and 562. Mr. Oscar Mitchell, with whom Mr. William D. Bailey and Mr. Albert C. Gillette were on the brief, for appellants in Nos. 563 and 564. ~ Mr. Edgar W. MacPherran, for appellants in Nos. 565 and 566, submitted. 174 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. Mr. Egbert 8. Oakley and Mr. Patrick J. Ryan, with whom Mr. Clifford L. Hilton, Attorney General of the State of Minnesota, and Mr. Montreville J. Brown were on the brief, for appellees. Mr. Justice Van Devanter delivered the opinion of the Court. These are suits to restrain and prevent the enforcement of a taxing act adopted by the State of Minnesota, April 11, 1921, c. 223, Laws 1921. The principal sections of the act are copied in the margin 1 and may be summarized as follows: The first subjects all who are “ engaged in the business of mining or producing iron ore or other x “ Section 1. Every person engaged in the business of mining or producing iron ore or other ores in this state shall pay to the state of Minnesota an occupation tax equal to 6 per cent of the valuation of all ores mined or produced, which said tax shall be in addition to all other taxes provided for by law, said tax to be due and payable from such person on May 1 of the year next succeeding the calendar year covered by the report thereupon to be filed as hereinafter provided. “ Sec. 2. The valuation of iron or other ores for the purposes of determining the amount of tax to be paid under the provisions of Section 1 of this act shall be ascertained by subtracting from the value of such ore at the place where the same is brought to the surface of the earth, such value to be determined by the Minnesota tax commission : “ 1. The reasonable cost of separating the ore from the ore body, including the cost of hoisting, elevating, or conveying the same to the surface of the earth. “ 2. If the ore is taken from an open pit mine, an amount for each ton of ore mined or produced during the year equal to the cost of removing the overburden, divided by the number of tons of ore uncovered, the number of tons of ore uncovered in each such case to be determined by the Minnesota Tax Commission. “ 3. If the ore is taken from an underground mine, an amount for each ton of ore mined or produced during the year equal to the cost of sinking and constructing shafts and running drifts, divided by the number of tons of ore that can be advantageously taken out through such shafts and drifts, the number of tons of ore that can be advan- OLIVER IRON CO. v. LORD. 175 172 Opinion of the Court. ores” within the State to the payment in each year of “ an occupation tax ” equal to 6 per cent, of the value of the ore mined or produced during the preceding year,— such tax to be “ in addition to all other taxes.” The second directs that the tax be computed on the value of the ore at the place where it is “ brought to the surface of the earth ” less certain deductions to be noticed presently. The third requires all who are engaged in such business to make on or before the first of February in each year a true report under oath of relevant information respecting their mining operations during the preceding year. And the sixth provides that where such a report is not made the State Tax Commission shall determine, from such information as it may possess or obtain, the amount and tageously taken out in each such case to be determined by the Minnesota Tax Commission. “ 4. The amount of royalties paid on the ore mined or produced during the year. “ 5. A percentage of the ad valorem taxes levied for said year against the realty in which the ore is deposited equal to the percentage that the tons mined or produced during such year bears to the total tonnage in the mine. “ 6. The amount or amounts of all the foregoing subtractions shall be ascertained and determined by the Minnesota Tax Commission. “ Sec. 3. Every person engaged in such mining or production of ores shall, on or before the first day of February, 1922, and annually thereafter on or before the first day of February of each year, file with said commission under oath a correct report in such form and containing such information as the tax commission may require, covering the preceding calendar year.” “ Sec. 6. If any person, subject to this act, shall fail to make the report provided for in section 3 hereof at the time and in the manner therein provided, the tax commission shall in such case, upon such information as it may possess or obtain, ascertain the kind and amount of ore mined or produced, together with the valuation thereof, and shall thereon find and determine the amount of the tax due from such person, and there shall be added thereto a penalty for failure to report, which penalty shall equal ten per cent of the tax imposed and shall be treated as a part thereof.” 176 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. value of the ore and shall compute the tax and include therein a penalty of 10 per cent, for the failure to make the report. The plaintiffs are corporations engaged in the business of mining or producing iron ore from mines within the State, and the defendants are the officers designated to carry the act into effect. Preparatory to assessing the tax in 1922 the defendants requested the plaintiffs to make the prescribed reports of their mining operations during 1921, which the plaintiffs refused to do because they conceived that the act was invalid. The defendants then proceeded to take the requisite steps for imposing the tax, and the plaintiffs brought these suits to restrain and prevent such action on the grounds that the act and the tax about to be imposed were in conflict with the commerce clause of the Constitution of the United States, with the equal protection clause of the Fourteenth Amendment and with a clause in § 1 of article 9 of the state constitution providing “ Taxes shall be uniform upon the same class of subjects.” The cases were heard together on an agreed statement of facts and some supplemental evidence which was free from conflict. One of the matters stipulated was that the suits were brought in circumstances making them cognizable in equity. The District Court sustained the act and the tax and dismissed the suits on the merits. The cases are here on direct appeals by the plaintiffs under § 238 of the Judicial Code. The parties differ about the nature of the tax, the plaintiffs insisting it is a property tax and the defendants that it is an occupation tax. Both treat the question as affecting the solution of other contentions. There has been no ruling on the point by the Supreme Court of the State. We think the tax in its essence is what the act calls it—an occupation tax. It is not laid on the land containing the ore, nor on the ore after removal, but on OLIVER IRON CO. v. LORD. 177 172 Opinion of the Court. the business of mining the ore, which consists in severing it from its natural bed and bringing it to the surface where it can become an article of commerce and be utilized in the industrial arts. Mining is a well recognized business wherein capital and labor are extensively employed. This is particularly true in Minnesota. Obviously a tax laid on those who are engaged in that business, and laid on them solely because they are so engaged, as is the case here, is an occupation tax. It does not differ materially from a tax on those who engage in manufacturing. Stratton’s Independence n. Howbert, 231 U. S. 399, 414; Stanton v. Baltic Mining Co., 240 U. S. 103, 114. The plaintiffs regard Dawson v. Kentucky Distilleries & Warehouse Co., 255 U. S. 288, as making the other way. But that case is not in point. The tax there considered, as the opinion shows (pp. 292-294), was not laid on any business, but on the mere exertion by an owner of distilled spirits of his right to withdraw them from a bonded warehouse, and had “ none of the ordinary incidents of an occupation tax.” We shall therefore treat the tax as an occupation tax in dealing with the contentions presented: The chief contention is that mining as conducted by the plaintiffs, if not actually a part of interstate commerce, is so closely connected therewith that to tax it is to burden or interfere with such commerce, which a State cannot do consistently with the commerce clause of the Constitution of the United States. The facts on which the contention rests are as follows: The demand or market within the State for iron ore covers only a negligible percentage of what is mined by the plaintiffs.2 Practically all of their output is mined to fill existing contracts with consumers outside the State 2 In 1921, out of a total output of 18,167,370 tons the amount sold and used within the State was 261,622 tons. 51826°—23-------12 178 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. and passes at once into the channels of interstate commerce. Three-fourths of it is from open pit mines and one-fourth from underground mines. At the open pit mines empty cars are run from adjacent railroad yards into the mines and there loaded. Steam shovels sever the ore from its natural bed and lift it directly into the cars. When loaded the cars are promptly returned to the railroad yards, where they are put into trains which start the ore on its interstate journey. The several steps follow in such succession that there is practical continuity of movement from the time the ore is severed from its natural bed. The operations within the mine and the movement of the cars into and out of the mine are conducted by the plaintiffs. The subsequent transportation is by public carriers. At the underground mines the plaintiffs dig the ore, bring it to the surface through shafts and put it in elevated pockets where it readily can be loaded into cars. The subsequent movements are much the same as at the open pit mines, but their continuity is not so pronounced. Some of the ore from both kinds of mines—between 10 and 20 per cent.—is concentrated by washing or beneficiated after coming out of the mine and before starting out of the State, but our conclusion respecting the usual operations renders this deflection immaterial. Plainly the facts do not support the contention. Mining is not interstate commerce, but, like manufacturing, is a local business subject to local regulation and taxation. Kidd v. Pearson, 128 U. S. 1, 20; Capital City Dairy Co. v. Ohio, 183 U. S. 238, 245; Delaware, Lackawanna & Western R. R. Co. v. Yurkonis, 238 U. S. 439, 444; Hammer v. Dagenhart, 247 U. S. 251, 272; United Mine Workers v. Coronado Coal Co., 259 U. S. 344, 410. Its character in this regard is intrinsic, is not affected by the intended use or disposal of the product, is not controlled by contractual engagements, and persists even though the OLIVER IRON CO. v. LORD. 179 172 Opinion of the Court. business be conducted in close connection with interstate commerce. Cornell v. Coyne, 192 U. S. 418; Browning v. Way cross, 233 U. S. 16, 22; Delaware, Lackawanna & Western R. R. Co. v. Yurkonis, supra; General Railway Signal Co. v. Virginia, 246 U. S. 500; Hammer n. Dagen-hart, supra; Arkadelphia Milling Co. v. St. Louis Southwestern Ry. Co., 249 U. S. 134, 151; Crescent Cotton Oil Co. v. Mississippi, 257 U. S. 129, 136; Heisler v. Thomas Colliery Co., 260 U. S. 245. The ore does not enter interstate commerce until after the mining is done, and the tax is imposed only in respect of the mining. No discrimination against interstate commerce is involved. The tax may indirectly and incidentally affect such commerce, just as any taxation of railroad and telegraph lines does, but this is not a forbidden burden or interference. The contentions made under the equal protection provision of the Fourteenth Amendment and under the state constitutional provision that “ Taxes shall be uniform upon the same class of subjects ” present a question of classification and have been argued together. Consistently with both provisions the legislature of the State may exercise a wide discretion in selecting the subjects of taxation, particularly as respects occupation taxes. It may select those who are engaged in one class of business and exclude others, if all similarly situated are brought within the class and all members of the class are dealt with according to uniform rules. Southwestern Oil Co. v. Texas, 217 U. S. 114, 121; State ex rel. n. Parr, 109 Minn. 147, 152. Here the selection is of all who are engaged in mining or producing ores on their own account, that is to say, as owners or lessees. The selection seems to be an admissible one, so we turn to the objections urged against it. One is that contractors who strip off the overburden of soil, gravel, etc., in open pit mines, other contractors who 180 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. load the ore in such mines into cars and still others, usually four in a group, who take ore out of underground mines, are not included. But none of these are engaged in mining on their own account. Instead they are working for those who are so engaged. However important their service, they are not principals in the business, but employees; and their pay, whatever it be, is part of the expense of the business. Their omission has a reasonable basis. Another objection is that all owners and lessees who mine or produce ore are included while those who do extensive development work, but remove no ore, are omitted. This is not fairly subject to criticism. Equality does not require that unproductive mining be taxed along with productive mining. Besides, if ore is uncovered or made accessible by such development work the tax will be imposed when the ore is mined. Among the deductions which the act provides shall be made from the value of the ore before computing the tax is 11 The amount of royalties paid on the ore mined and produced during the year.” This provision is assailed as working a serious discrimination in favor of those who operate under leases and pay royalties, as all the lessees do, and against owners who operate their own mines and pay no royalties. The question is an important one and has not been before the Supreme Court of the State. It apparently requires a construction of the particular provision along with other parts of the act, and possibly of the state constitutional provision. After that it may be that there would be need for turning to the Fourteenth Amendment. “ Only those whose rights are directly affected can properly question the constitutionality of a state statute and invoke our jurisdiction in respect thereto.” Hendrick v. Maryland, 235 U. S. 610, 621 ; Hatch n. Reardon, 204 U. S. 152, 160; Plymouth Coal Co. v. Pennsylvania, 232 U. S. 531, 544. The record shows that of the many iron mines in the State all but six are operated OLIVER IRON CO. v. LORD. 181 172 Opinion of the Court. under leases and that none of the six was operated in anyway during 1921, the year in respect of which the tax was about to be imposed when these suits were begun. Therefore no tax could be imposed in respect of the six mines based on that year’s operations, and it is made plain that the defendants have no purpose to impose one. It cannot be merely assumed that mining has been resumed at those mines nor that any tax in respect of them for later years is now threatened. The situation in these cases is therefore such that none of the plaintiffs is entitled to invoke a decision of the question. We accordingly leave it entirely open. It also is said that the royalty provision and others respecting deductions will work a discrimination as between different lessees in that some will be subjected to a higher tax than others. No doubt there will be differences in the amount, but they will result from differences in situation and not from differences in treatment. Some lessees pay higher royalties than others and will secure a higher deduction on that score. Some are subjected to greater expense in mining than others and will secure reductions accordingly. And some are subjected to higher local taxes on their mines than others—the mines being scattered through several counties and minor municipal subdivisions—and this will cause the deductions to vary. But all lessees will have the benefit of deductions adjusted to the royalties, expenses and taxes actually paid; and the value of the ore, according to which the tax will be computed, will in each instance be its actual value when it is brought out of the mine less those deductions. In short, the tax is to be adjusted to the value of the output less the major expenses of the business, and this according to uniform rules. We, therefore, cannot say that it is intended to or will work any arbitrary or unreasonable discrimination as between different lessees. Decrees affirmed. 182 OCTOBER TERM, 1922. Syllabus. 262 U. S. CITY OF TRENTON v. STATE OF NEW JERSEY. ERROR TO THE SUPREME COURT OF THE STATE OF NEW JERSEY. No. 430. Argued March 2, 1923.—Decided May 7, 1923. 1. A State has power, and it is its duty, to control and conserve its water resources for the benefit of all its inhabitants. P. 185. 2. Diversion of waters from the sources of_supply for this use, is a legitimate function of the State, which may be left to private enterprise subject to state regulation, or be performed directly, or be delegated either to bodies politic created for the purpose or to the State’s municipalities. P. 185. 3. In the absence of state constitutional provisions safeguarding it to them, municipalities have no inherent right of self-government which is beyond the legislative control of the State, but are merely departments of the State, with powers and privileges such as the State has seen fit to grant, held and exercised subject to its sovereign will. P. 187. • 4. The power of a State over the rights and properties of cities held and used for “ governmental purposes,” is unrestrained by the Contract Clause, or the Fourteenth Amendment, of the Federal Constitution. P. 188. 5. The distinction between a municipality as an agent of the State for governmental purposes, and as an organization to care for local needs in a private or proprietary capacity, affords no ground for the application of those constitutional restraints against a State in favor of its own municipality. P. 191. 6. The City of Trenton, as successor to a grant made by New Jersey to a private corporation, claimed a perpetual right, unburdened by license fee or other charge, to divert all the water that might be required for the use of the City or its inhabitants from the Delaware River, and resisted a charge, imposed under c. 252, Laws N. J., 1907, for water diverted beyond the amount being legally diverted when the act was passed and in excess of a per capita maximum prescribed by the act. Held, that the City could not invoke the Contract Clause or the Fourteenth Amendment, even assuming that the private corporation might have done so if its rights had not passed to the City, and that, in view of previous decisions, the City’s contention to the contrary did not present a substantial federal question. Pp. 185, 192. Writ of error to review 117 Atl. 158, dismissed. TRENTON v. NEW JERSEY. 183 182 Opinion of the Court. Error to a judgment of the Supreme Court of New Jersey, affirmed by the Court of Errors and Appeals, in favor of the State, in its action to recover license fees from the City of Trenton, for water diverted from the Delaware River. Mr. A. V. Dawes, with whom Mr. Chas. E. Bird was on the brief, for plaintiff in error. Mr. William Newcom, Assistant Attorney General, with whom Mr. Thomas F. McCran, Attorney General, of the State of New Jersey, was on the brief, for defendant in error. Mr. Justice Butler delivered the opinion of the Court. The State of New Jersey recovered judgment against the City of Trenton for $14,310.00, in an action brought in the State Supreme Court. The judgment was affirmed by the Court of Errors and Appeals, and is here on writ of error. The State’s right to recover depends upon the validity of an act of the legislature (c. 252, Laws of 1907). The City asserts that this act offends against the contract clause of the Constitution of the United States, and that it takes property owned by the City in its private or proprietary capacity for public use without just compensation and without due process of law in violation of the Fourteenth Amendment. The act provides that: “ Every municipality, corporation or private person now diverting the waters of streams or'lakes with outlets for the purpose of a public water-supply shall make annual payments on the first day of May to the State Treasurer for all such water hereafter diverted in excess of the amount now being legally diverted; provided, however, no payment shall be required until such legal diversion shall exceed a total amount equal to one hundred f 184 , OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. (100) gallons daily, per capita for each inhabitant of the municipality or municipalities supplied, as shown by the census of one thousand nine hundred and five.” The City claims the right to take from the Delaware River all the water that it requires without limitation as to quantity and without license fee for any part thereof, and that such right was acquired by the President and Directors of the Trenton Water Works (hereinafter called the water company) by grant direct from the State March 24, 1852, and that the City acquired this right by purchase from the water company. Briefly, the basis of the City’s claim is as follows: By an Act of February 29, 1804, the President and Directors of the Trenton Water Works were created a body politic and corporate. They and their successors and assigns were made capable of disposing of water to such as might apply for the same for such annual rent and under such restrictions as they might think proper, and they were authorized to lay and extend their water mains through the streets of the City. Certain springs constituted the company’s source of supply, and by reason of increase of population ceased to be adequate. March 24, 1852, a supplement to the above mentioned act was passed, by which the company was authorized to take the water required either in whole or in part from the Delaware River. Later, March 2, 1855*, an act was passed, authorizing the City to purchase the whole or a majority of the shares of the capital stock of the water company, and the City purchased all of the stock. Thereafter, an Act of March 1, 1859, required the company to convey unto “ the inhabitants of the city of Trenton ” all the real estate, works and property and all the corporate powers, franchises and privileges of the company, and this conveyance was duly made. If the provision of the Act of 1907 imposing the license fee is valid as against the City, the judgment is right. TRENTON v. NEW JERSEY. 185 182 Opinion of the Court. The Court of Errors and Appeals held that it was valid; that the State under its police power might impose a license fee as specified in the act, and that this does not deprive the City of any contractual or property right. The State undoubtedly has power, and it is its duty, to control and conserve the use of its water resources for the benefit of all its inhabitants, and the Act of 1907 was passed pursuant to the policy of the State to prevent waste and to economize its water resources. Decision of the Court of Errors and Appeals in this case, 117 Atl. 158; McCarter v. Hudson Water Co., 70 N. J. Eq. 695, 701, 702, affirmed by this Court in 209 U. S. 349, 355; Collingswood v. Water-Supply Commission, 84 N. J. L. 104, 110; Cobb v. Davenport, 32 N. J. L. 369, 378. The only way the City could acquire the right to take the water of the Delaware River was by grant from the State or by authorized purchase or condemnation from one to whom the right had been granted by the State. State v. Jersey City, 94 N. J. L. 431, 433. The power to determine the conditions upon which waters may be so diverted is a legislative function. The State may grant or withhold the privilege as it sees fit. Assuming in favor of the City, that its grantor received a perpetual right, unburdened by license fee or other charge, to divert all the water required for the use of the City and its inhabitants, does it follow that the State as against the City is bound by contract and is without power to impose a license fee as provided in the act? The relations existing between the State and the water company were not the same as those between the State and the City. The company was organized and carried on its business for pecuniary profit. Its rights and property were privately owned and therefore safeguarded by the constitutional provisions here sought to be invoked by the City against the legislation of the State. The City is a political subdivision of the State, created as a con- 186 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. venient agency for the exercise of such of the governmental powers of the State as may be entrusted to it. The diversion of waters from the sources of supply for the use of the inhabitants of the State is a proper and legitimate function of the State. This function may be left to private enterprise, subject to regulation by the State; it may be performed directly; or it may be delegated to bodies politic created for that purpose, or to the municipalities of the State. Power to own, maintain and operate public utilities, such as waterworks, gas and electric plants, street railway systems, public markets, and the like is frequently conferred by the States upon their cities and other political subdivisions. For the purpose of carrying on such activities, they are given power to hold and manage personal and real property. As said by this Court, speaking through Mr. Justice Moody, in Hunter v. Pittsburgh, 207 U. S. 161, 178, 179: “ The number, nature and duration of the powers conferred upon these corporations and the territory over which they shall be exercised rests in the absolute discretion of the State. Neither their charters, nor any law conferring governmental powers, or vesting in them property to be used for governmental purposes, or authorizing them to hold or manage such property, or exempting them from taxation upon it, constitutes a contract with the State within the meaning of the Federal Constitution. The State, therefore, at its pleasure may modify or withdraw all such powers, may take without compensation such property, hold it itself, or vest it in other agencies, expand or contract the territorial area, unite the whole or a part of it with another municipality, repeal the charter and destroy the corporation. All this may be done, conditionally or unconditionally, with or without the consent of the citizens, or even against their protest. In all these respects the State is supreme, and its legislative body, conforming its action to the state constitu- TRENTON v. NEW JERSEY. 187 182 Opinion of the Court. tion, may do as it will, unrestrained by any provision of the Constitution of the United States. . . . The power is in the State and those who legislate for the State are alone responsible for any unjust or oppressive exercise of it.” In New Jersey it has been held that within the limits prescribed by the state constitution, the legislature may delegate to municipalities such portion of political power as they may deem expedient, withholding other powers, and may withdraw any part of that which has been delegated. Van Cleve v. Passaic Valley Sewerage Commissioners, 71 N. J. L. 183, 198. In the absence of state constitutional provisions safeguarding it to them, municipalities have no inherent right of self government which is beyond the legislative control of the State.1 A municipality is merely a department of the State, and the State may withhold, grant or withdraw powers and privileges as it sees fit. However great or small its sphere of action, it remains the creature of the State exercising and holding powers and privileges subject to the sovereign will. See Barnes v. District of Columbia, 91 U. S. 540, 544, 545. In Mount Pleasant v. Beckwith, 100 U. S. 514, 524, 525, it was held that where a municipal corporation is legislated out of existence and its territory annexed to other corporations, the latter, unless the legislature otherwise provides, become entitled to all its property and immunities. In the opinion it is said (pp. 524, 525): “ Institutions of the kind, whether called cities, towns, or counties, are the auxiliaries of the State in the important business of municipal rule; but they cannot have the least pretension to sustain their privileges or their existence upon anything like a contract between themselves and the legislature of the State, because there is 1 Cf. 1 Dillon Municipal Corporations, 5th ed., § 98, p. 154, et seq. 188 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. not and cannot be any reciprocity of stipulation between the parties, and for the further reason that their objects and duties are utterly incompatible with everything partaking of the nature of compact.” The power of the State, unrestrained by the contract clause or the Fourteenth Amendment, over the rights and property of cities held and used for “ governmental purposes ” cannot be questioned. In Hunter n. Pittsburgh, supra, 179, reference is made to the distinction between property owned by municipal corporations in their public and governmental capacity and that owned by them in their private or proprietary capacity, and decisions of this Court which mention that distinction are referred to.2 In none of these cases was any power, right or property of a city or other political subdivision held to be protected by the contract clause or the Fourteenth Amendment. This Court has never held that these subdivisions may invoke such restraints upon the power of the State.3 In East Hartford n. Hartford Bridge Co., 10 How. 511, 533, 534, 536, it appeared that for many years a franchise to operate a ferry over the Connecticut River belonged to the town of Hartford; that upon the incorporation of ’ Commissioners n. Lucas, 93 U. S. 108, 115; Meriwether v. Garrett, 102 U. S. 472, 518, 530; Essex Public Road Board v. Skinkle, 140 U. S. 334, 342; New Orleans v. New Orleans Water Works Co., 142 U. S. 79, 91; Covington n. Kentucky, 173 U. S. 231, 240; Worcester v. Worcester Consolidated Street Ry. Co., 196 U. S. 539, 551; Monterey v. Jacks, 203 U. S. 360. 8 Some state cases holding that the state legislature is not restrained by federal constitutional provisions: St. Louis v. Shields, 52 Mo. 351, 354; Police Jury of Bossier v. Corporation of Shreveport, 5 La. Ann. 661, 665; Trustees of Schools v. Tatman, 13 Ill. 27; Board of Education v. Aberdeen, 56 Miss. 518; Darlington n. City of New York, 31 N. Y. 164, 193. See contra: Town of Milwaukee v. City of Milwaukee, 12 Wis. 93, 109; Grogan v. San Francisco, 18 Cal. 590, 612, 613; Mount Hope Cemetery v. Boston, 158 Mass. 509, 519; Spaulding v. Andover, 54 N. H. 38, 56; Ellerman v. McMains, 30 La. Ann. 190. TRENTON v. NEW JERSEY. 189 182 Opinion of the Court. East Hartford, the legislature granted to it one-half of the ferry during the pleasure of the General Assembly, and that subsequently, after the building of a bridge across the river, the legislature discontinued the ferry. It was held that this was not inconsistent with the contract clause of the Federal Constitution. The reasons given in the opinion (pp. 533, 534) support the contention of the State here made that the City cannot possess a contract with the State which may not be changed or regulated by state legislation. In Worcester v. Worcester Consolidated Street Ry. Co., 196 U. S. 539, 548, it was held that the obligation of the street railway company to the city to pave and repair streets occupied by it, based on accepted conditions of a municipal ordinance granting right of location, is not private property beyond the legislative control of the State, and that state legislation taxing the company and thereby relieving it from its obligation to the city to pave and repair such streets was not void as violating the contract clause of the Federal Constitution. In the opinion it is said (pp. 548, 549): “ The question then arising is, whether the legislature, in the exercise of its general legislative power, could abrogate the provisions of the contract between the city and the railroad company with the assent of the latter, and provide another and a different method for the paving and repairing of the streets through which the tracks of the railroad company were laid under the permit of their extended location. We have no doubt that the legislature of the Commonwealth had that power. A municipal corporation is simply a political subdivision of the State, and exists by virtue of the exercise of the power of the State through its legislative department. The legislature could at any time terminate the existence of the corporation itself, and provide other and different means for the government of the district comprised within the limits of 190 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. the former city. The city is the creature of the State.” Citing East Hartford v. Hartford Bridge Co., 10 How. 511, 533, 534; United States v. Railroad Company, 17 Wall. 322, 329; New Orleans v. Clark, 95 U. S. 644, 654; Commissioners of Laramie County n. Commissioners of Albany County, 92 U. S. 307; Commissioners v. Lucas, 93 U. S. 108, 114. In Pawhuska v. Pawhuska Oil & Gas Co., 250 U. S. 394, 399, it was held that a legislative grant to a city of the power to regulate rates to be charged to the city and its inhabitants by a gas company might be withdrawn by the State from the city and conferred upon a commission, and that thereby no question was presented under the contract clause of the Federal Constitution. In the opinion, after a statement of the issue, it is said (pp. 397, 398) : “ Thus the whole controversy is as to which of two existing agencies or arms of the state government is authorized for the time being to exercise in the public interest a particular power, obviously governmental, subject to which the franchise confessedly was granted. In this no question under the contract clause of the Constitution of the United States is involved, but only a question of local law, the décision of which by the Supreme Court of the State is final. ... In New Orleans v. New Orleans Water Works Co., 142 U. S. 79, where a city, relying on the contract clause, sought a review by this court of a judgment of a state court sustaining a statute so modifying the franchise of a water works company as to require the city to pay for water used for municipal purposes, to which it theretofore was entitled without charge, the writ of error was dismissed on the ground that no question of impairment within the meaning of the contract clause was involved.” 4 4Cf. Williams v. Eggleston, 170 U. S. 304, 310; Mason v. Missouri, 179 U. S. 328, 335. TRENTON v. NEW JERSEY. 191 182 Opinion of the Court. The distinction between the municipality as an agent of the State for governmental purposes and as an organization to care for local needs in a private or proprietary capacity has been applied in various branches of the law of municipal corporations. The most numerous illustrations are found in cases involving the question of liability for negligent acts or omissions of its officers and agents. See Harris v. District of Columbia, 256 U. S. 650, and cases cited. It has been held that municipalities are not liable for such acts and omissions in the exercise of the police power, or in the performance of such municipal faculties as the erection and maintenance of a city hall and courthouse, the protection of the city’s inhabitants against disease and unsanitary conditions, the care of the sick, the operation of fire departments, the inspection of steam boilers, the promotion of education and the administration of public charities. On the other hand, they have been held liable when such acts or omissions occur in the exercise of the power to build and maintain bridges, streets and highways, and waterworks, construct sewers, collect refuse ^nd care for the dump where it is deposited.5 Recovery is denied where the act or omission occurs in the exercise of what are deemed to be governmental powers, and is permitted if it occurs in a proprietary capacity. The basis of the distinction is difficult to state, and there 6 See Winona v. Botzet, 169 Fed. 321, 332, et seq., and cases cited. See also: Brantman v. Canby, 119 Minn. 396 (recovery permitted for gas explosion where city furnished gas to inhabitants) ; Pettengill v. Yonkers, 116 N. Y. 558, 565 (recovery permitted for injury sustained by excavation in street to lay mains) ; Watson v. Needham, 161 Mass. 404, 411 (damages recovered for breach of contract by water commissioners to furnish water for plaintiff’s boiler, resulting in injury to vegetables in greenhouse heated thereby); Brown v. Salt Lake City, 33 Utah, 222, 234 (city held liable for death by drowning in conduit forming a part of city water works system). These cases and others that might be cited serve in general to illustrate the course of decision. 192 OCTOBER TERM, 1922. Syllabus. ■ 262 U. S. is no established rule for the determination of what belongs to the one or the other class. It originated with the courts. Generally it is applied to escape difficulties, in order that injustice may not result from the recognition of technical defenses based upon the governmental character of such corporations.6 But such distinction furnishes no ground for the application of constitutional restraints here sought to be invoked by the City of Trenton against the State of New Jersey. They do not apply as against the State in favor of its own municipalities. We hold that the City cannot invoke these provisions of the Federal Constitution against the imposition of the license fee or charge for diversion of water specified in the state law here in question. In view of former opinions of this Court, no substantial federal question is presented. Pawhuska v. Pawhuska Oil & Gas Co., supra, and cases cited.7 The writ of error is dismissed. CITY OF NEWARK v. STATE OF NEW JERSEY. ERROR TO THE SUPREME COURT OF THE STATE OF NEW JERSEY. No. 469. Argued March 2, 1923.—Decided May 7, 1923. 1. The Equal Protection Clause of the Fourteenth Amendment cannot be invoked by a city against its State. P. 196. Trenton v. New Jersey, ante, 182. 2. So held, where it was claimed that the method adopted in c. 252, Laws of New Jersey, 1907, for fixing maximum amounts of water divertible without payment of license fees to the State, worked ’ Cf. 1 Dillon Municipal Corporations, 5th ed., § 110, p. 183. ■ TSee decisions per curiam: Chicago v. Dempcy, 250 U. S. 651; Michigan ex rel. Groesbeck v. Detroit United Ry., 257 U. S. 609; Chicago v. Chicago Railways Co., id. 617; Avon v. Detroit United Ry., id. 618; Edgewood v. Wilkinsburg & East Pittsburgh Street Ry. Co., 258 U. S. 604; Sapulpa v. Oklahoma Natural Gas Co., id. 608. NEWARK v. NEW JERSEY. 193 192 Opinion of the Court. arbitrary discriminations, prejudicial to the City of Newark. P. 195. Writ of error to review 117 Atl. 158, dismissed. Error to a judgment of the Supreme Court of New Jersey, affirmed by the Court of Errors and Appeals, in favor of the State, in its action to recover license fees from the City of Newark, for water diverted from the Pequannock River. Mr. George W. Wickersham, with whom Mr. Jerome T. Congleton was on the briefs, for plaintiff in error. Mr. William Newcom, Assistant Attorney General, with whom Mr. Thomas F. McCran, Attorney General, of the State of New Jersey, was on the brief, for defendant in error. Mr. Justice Butler delivered the opinion of the Court. The State of New Jersey recovered judgment against the City of Newark for $18,104.08 and costs, in an action brought in the State Supreme Court. The judgment was affirmed by the Court of Errors and Appeals, and the case is here on writ of error. It is based on a state enactment which is attacked on the sole ground that it violates the equal protection clause of the Fourteenth Amendment. The State’s right to recover depends upon the validity of an enactment of the State (c. 252, Laws of 1907) which is sufficiently set forth in the decision of this Court in Trenton v. New Jersey, handed down on this day, ante, 182. In East Jersey Water Co. v. Board of Conservation & Development, 91 N. J. L. 448, 453, it is said: “The statute requires payment / for all such water hereafter diverted in excess of the amount now being legally diverted,’ with the proviso that no payment be required until the legal diversion shall exceed one hun-51826°—23-------13 194 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. dred gallons per day per capita. We are of opinion that ‘ legally diverted ’ means not a future diversion, but one now being exercised under a legal right, and that under this statute a legal abstractor may take what he was diverting in 1907, and, if that did not reach the statutory maximum of exemption, as much more as is required to make the total diversion one hundred gallons per day per capita for each of the municipalities supplied, without payment of the license fee. “ If, in 1907, the daily diversion exceeded one hundred gallons per capita, the amount then diverted, if lawful, may be taken without payment, and if it was less, no license fee can be imposed until it exceeds the statutory quantity.” The complaint alleged that under the provisions of this act the City was “ permitted to divert ... an average daily free allowance of water to the amount of 36,241,-666 gallons, the said last mentioned amount being the amount of water which was being diverted by said municipality on June 17th, aforesaid, the date when the act aforesaid became effective and operative ”; and claimed for each of the years subsequent to July 1, 1914, a license fee of one dollar per million gallons for the excess of the daily average diversion of water over the quantity above specified. The answer alleged that prior to the passage of the Act of 1907, the City had acquired a plant capable of furnishing 50,000,000 gallons of water per day, and set up certain separate defenses. At the trial, the court on motion of the State, struck out the separate defenses; the facts were not in controversy, and judgment was given for the amount claimed. About the same time, the State also recovered judgment against the City of Trenton foi the license fee imposed by the same act. Both cases were taken to the Court of Errors and Appeals, the highest court of the State, and there by one decision the judgments were affirmed. (117 Atl. 158.) That court said: NEWARK v. NEW JERSEY. 195 192 Opinion of the Court. “ The facts are not in dispute. It is conceded that the city of Trenton, at the time of the enactment of the act of 1907, was taking from the Delaware river daily 14,200,-000 gallons of water for local use, and that the city of Newark was daily extracting from the Pequannock river 36,241,666 gallons for local use. These diversions represent the antestatutory flowage, and are considered by the state under the eighth section of the act of 1907 to be non-taxable.” To establish its contention that § 8 of the enactment in question so discriminates between those authorized to divert water that it violates the equal protection clause of the Fourteenth Amendment, the City says that the highest court has in this case construed the words “ now being legally diverted ” to mean the amount of water which was actually diverted on the day when the act went into effect, namely, June 17, 1907; that had the City flowed into its mains 50,000,000 gallons that day, the tax would have been levied only upon the excess over that amount, and on the facts shown in the complaint, there would have been no tax in the years above referred to; that the purely accidental figure of 36,241,666 gallons, the amount actually diverted on that day, will for all time be the basis of the assessment of the tax upon the City. It is suggested that cities less populous by one-half than Newark, but owning plants far in excess of their needs might have diverted on June 17, 1907, twice the amount of water which the City of Newark diverted, and that a city twice as large might have diverted half as much, and the former of such cities would thereby have procured an almost perpetual exemption, and the latter would have brought on itself an insupportable burden of indefinite duration; and that accidents of climate, of conflagrations and of breaks in the mains on the critical date, June 17, 1907, would have resulted in increasing the exemption. 196 OCTOBER TERM, 1922. Syllabus. 262 U. S. The enforcement by the State of the provision of the act imposing upon the City the specified annual payments for such diversion of water does not violate the equal protection clause of the Fourteenth Amendment. The regulation of municipalities is a matter peculiarly within the domain of the State. In Trenton v. New Jersey, decided this day, ante, 182, it is held that the imposition of the license fee specified in this act is not a taking of property of that city in violation of the Fourteenth Amendment. The reasons supporting that conclusion apply here. The City cannot invoke the protection of the Fourteenth Amendment against the State.1 Considering the former opinions of this Court, there is no substantial federal question in the case. The writ of error is dismissed. BEGG ET AL., RECEIVERS OF MANHATTAN & QUEENS TRACTION CORPORATION, v. CITY OF NEW YORK ET AL. APPEAL FROM THE CIRCUIT COURT OF APPEALS FOR THE SECOND CIRCUIT. No. 5. Argued April 13, 16, 1923.—Decided May 7, 1923. When an application is made to the District Court in a pending suit, for a summary injunction to protect the exercise of the court’s jurisdiction in that suit and prevent interference with property of which it has custody therein, the jurisdiction of the summary proceeding depends upon, and takes its character from, the jurisdiction of the main cause; and, when this is based on diverse citizenship only, the summary jurisdiction rests wholly on that basis also, even though federal questions are set up in the application as ground for the summary relief; and, consequently, a decree of the Circuit Court of Appeals, upon review of the sum- 1 Cf. Williams v. Eggleston, 170 U. S. 304, 310; Mason v. Missouri, 179 U. S. 328, 335. BEGG v. NEW YORK CITY. 197 196 Opinion of the Court. mary proceeding, has the same finality, under Jud. Code, § 128, as its decree in the main cause would have, and is not reviewable here by appeal. P. 198. Appeal to review 266 Fed. 625, dismissed. Appeal from a decree of the Circuit Court of Appeals, reversing a decree of the District Court, which granted a summary injunction upon application of receivers in a pending equity suit. Mr. Lindley M. Garrison, with whom Mr. Watson B. Robinson, Mr. Robert S. Sloan, Mr. Arthur J. Egan, Mr. Charles A. Boston and Mr. Charles A. Frueauff were on the briefs, for appellants. Mr. Vincent Victory, with whom Mr. John P. O’Brien was on the brief, for appellees. Mr. Justice Sanford delivered the opinion of the Court. On the threshold of the hearing the appellees moved to dismiss this appeal, upon the ground that jurisdiction depends entirely upon diversity of citizenship and the decree of the Circuit Court of Appeals is therefore final. The appellants were appointed receivers of the Manhattan & Queens Traction Corporation in a suit in equity brought against it in the United States District Court for the Eastern District of New York by a judgment creditor, for the administration of its assets. The jurisdiction depended entirely upon diversity of citizenship of the parties. The receivers, after taking possession of the Corporation’s railway in the City of New York, which had been partly completed, filed a petition in this equity cause, alleging that the City, through its Board of Estimate and Apportionment, was threatening to adopt a resolution declaring a forfeiture of the franchise contract of the Corporation and of the completed portion of the railway, for failure to complete the railway within the 198 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. prescribed time. This, it was averred, would deprive the Corporation of its property in violation of the Fifth and Fourteenth Amendments of the Constitution of the United States and Article I of the Constitution of New York, and cause irreparable injury to the Corporation, its creditors, and the property in the custody of the receivers. Upon this petition the court granted the receivers ex parte a temporary injunction and an order to show cause why it should not be continued during the receivership; and thereafter, upon a summary hearing, the temporary injunction was made permanent and the City and the Board were enjoined until further order of the court from passing a resolution forfeiting or affecting the franchise contract of the Corporation or declaring its railway and property in the hands of the receivers to be the property of the City or otherwise interfering therewith in any manner. Upon appeal by the City and the Board, the Circuit Court of Appeals reversed the order of the District Court granting this injunction. Gas & Electric Securities Co. v. Traction Corporation, 266 Fed. 625, 641. And the receivers have appealed to this Court. Section 128 of the Judicial Code provides that, with certain exceptions not here involved, “ the judgments and decrees of the circuit courts of appeals shall be final in all cases in which the jurisdiction is dependent entirely upon the opposite parties to the suit or controversy being . . . citizens of different States.” This refers to the jurisdiction of the federal court of first instance: and if the jurisdiction of the District Court depended entirely upon diversity of citizenship the appeal must be dismissed. Shulthis v. McDougal, 225 U. S. 561, 568. It is well settled that jurisdiction of a petition in intervention asserting a claim upon the property or fund being administered by the court is determined by the jurisdiction originally invoked in the main cause, by BEGG v. NEW YORK CITY. 199 196 Opinion of the Court. virtue of which the intervening petition is entertained; and hence that if the jurisdiction in the main cause is such that a decree of the Circuit Court of Appeals would be final in respect thereto it is likewise final in respect to the intervening petition. St. Louis Railroad v. Wabash Railroad, 217 U. S. 247, 250; Rouse v. Letcher, 156 U. S. 47, 49; Gregory v. Van Ee, 160 U. S. 643, 645; Rouse v. Hornsby, 161 U. S. 588, 591; Pope v. Louisville Railway, 173 U. S. 573, 577; Ohio Railroad Commission v. Worthington, 225 U. S. 101, 104; Shulthis v. McDougal, supra, at p. 568. And this is true even although the intervening petition discloses an independent ground of federal jurisdiction; the jurisdiction by virtue of which it is entertained as an intervention being ascribed entirely to that which is invoked and exercised in the main cause. Rouse v. Letcher, supra, at pp. 49 and 50; Gregory v. Van Ee, supra, at p. 646. Manifestly the reason of the foregoing rule in reference to an affirmative petition of intervention, as set forth in the cases cited, applies with equal or greater force to a petition filed in a cause to protect the exercise of the jurisdiction of the court itself and prevent interference with property in its custody; which necessarily depends upon that jurisdiction and partakes directly of its character. This is recognized in Ohio Railroad Commission v. Worthington, supra, at p. 104, in which the distinction is pointed out between petitions filed in the main cause, taking their jurisdiction from it alone, and plenary suits of an ancillary character in which federal jurisdiction is invoked, not merely as ancillary to that in the main suit, but also upon independent grounds. In the present case the jurisdiction of the District Court to entertain the summary proceedings against the City and the Board was dependent entirely upon the jurisdiction in the main cause and cannot be ascribed to the federal constitutional grounds upon which the claim for 200 OCTOBER TERM, 1922. Syllabus. 262 U. S. relief was partly predicated, which in no wise enlarged the summary jurisdiction of the court, and could only have been relied upon as independent grounds of federal jurisdiction in a plenary suit. It results that the decree of the Circuit Court of Appeals as to the petition of the receivers has the same finality as would a decree in the main cause; jurisdiction of the one as of the other depending entirely upon the diversity of citizenship in the main cause. The appellees’ motion is accordingly granted, and the appeal Dismissed. WORK, SECRETARY OF THE INTERIOR, JOHNSON, GOVERNOR OF THE CHICKASAW NATION, ET AL. v. UNITED STATES EX REL. Mc-ALESTER-EDWARDS COMPANY. APPEAL FROM THE COURT OF APPEALS OF THE DISTRICT OF COLUMBIA. No. 258. Argued April 12, 1923.—Decided May 21, 1923. 1. The Act of February 8, 1918, c. 12, 40 Stat. 433, was enacted for the chief purpose of selling, after appraisal, the coal and asphalt deposits in segregated mineral land of the Choctaws and Chickasaws, subject to existing leases, and not for the appraisal and disposition of the surface, this having been provided for by the Act of February 19, 1912, c. 46, 37 Stat. 67. P. 206. ’ 2. Section 4 of the Act of February 8, 1918, supra, in providing that any lessee shall have the preferential right, upon certain conditions, to purchase “ at the appraised value ” any and all of the surface lying within his lease and heretofore reserved by order of the Secretary of the Interior, does not contemplate a new appraisement of the surface but refers to the value as previously ascertained by appraisement under the Act of February 19, 1912, supra. P. 207. 3. The lessee’s right in such case is given by the Act of 1918 without qualification, and is not left to the legal discretion of the Secretary of the Interior in the construction of the act. P. 208. work v. McAlester, etc. co. 201 200 Statement of the Case. 4. Therefore, a lessee having this preferential right and having elected to purchase and made due and timely tender of the value, as appraised under the Act of 1912, has a right to a mandamus against the Secretary of the Interior, the Governor of the Chickasaw Nation and the Principal Chief of the Choctaw Nation, to compel acceptance of the tender and issuance of an appropriate patent, as directed by § 7 of the Act of 1918. P. 208. 51 App. D. C. 171; 277 Fed. 573, affirmed. The relator, the McAlester-Edwards Coal Company, filed a petition in the Supreme Court of the District of Columbia, asking for a writ of mandamus to require the Secretary of the Interior and the Governor of the Chickasaw Nation and the Principal Chief of the Choctaw Nation to accept $10,360.06, the balance of the purchase price of $12,651.82 ($2,291.76 having already been tendered and accepted) tendered by the Coal Company in payment for certain surface lands to which under the Act of Congress of February 8, 1918, c. 12, § 4, 40 Stat. 433, it claimed a preferential right of purchase, and to require the Governor of the Chickasaw Nation and the Principal Chief of the Choctaw Nation to issue a patent to the Coal Company for the same and the Secretary of the Interior to approve it. The answer of the defendants below admitted allthe material facts alleged in the petition, but denied the right of the Coal Company to the mandamus on the ground that the construction put upon the Act of 1918 by the Secretary of the Interior, in the exercise of the discretion vested in him by the statute, did not give to the relator, the Coal Company, the preferential right asserted. The Supreme Court of the District overruled a demurrer to the answer, and the relator not pleading further, the petition was dismissed. On review in the Court of Appeals, the judgment of the District Supreme Court was reversed on the ground that the demurrer should have been sustained and the writ asked for should have issued. The cause was remanded to have the writ issue. 202 OCTOBER TERM, 1922. Statement of the Case. 262 U. S. The Coal Company is owner by assignment of a lease approved by the Secretary of the Interior of coal lands in Pittsburg County, Oklahoma, belonging to the Choctaw and Chickasaw Nations, executed in July, 1899, and running for 30 years. This lease permitted the lessee to use the surface of the land covered by the lease for the purpose of developing its coal mine. The Act of February 19, 1912, c. 46, 37 Stat. 67, authorized the Secretary of the Interior to sell the surface leased and unleased of the segregated mineral land of the Choctaws and Chicka-saws, reserved under previous laws, to include the entire estate of the Indians therein except the coal and asphalt reserved. The Secretary was required in the first section, quoted in the margin,1 to classify and have appraised the 1 That the Secretary of the Interior is hereby authorized to sell at not less than the appraised price, to be fixed as hereinafter provided, the surface, leased and unleased, of the lands of the Choctaw and Chickasaw Nations in Oklahoma segregated and reserved by order of the Secretary of the Interior dated March twenty-fourth, nineteen hundred and three, authorized by the Act approved July first, nineteen hundred and two. The surface herein referred to shall include entire estate save the coal and asphalt reserved. Before offering such surface for sale the Secretary of the Interior, under such regulations as he may prescribe, shall cause the same to be classified and appraised by three appraisers, to be appointed by the President, at a compensation to be fixed by him, not to exceed for salary and expenses for each appraiser the sum of fifteen dollars per day for time actually engaged in making such classification and appraisement. The classification and appraisement of the surface shall be by tracts, according to the Government survey of said lands, except that lands which are especially valuable by reason of proximity to towns or cities may, in the discretion of the Secretary of the Interior, be subdivided into lots or tracts containing not less than one acre. In appraising said surface the value of any improvements thereon belonging to the Choctaw and Chickasaw Nations, except such improvements as have been placed on coal or asphalt lands leased for mining purposes, shall be taken into consideration. The surface shall be classified as agricultural, grazing, or as suitable for town lots. The classification and appraisement provided for herein shall work v. McAlester, etc. co. 203 200 Statement of the Case. surface so to be sold. The second section, also quoted in the margin,2 gave a preferential right for sixty days to any coal or asphalt lessee to purchase at the appraised value, the surface of the land covered by his mining lease, not exceeding five per cent, of the whole surface, which the Secretary might extend to ten per cent., upon waiver of right by the lessee to use any more of the surface, but be completed within six months from the date of the passage of this Act, shall be sworn to by the appraisers, and shall become effective when approved by the Secretary of the Interior: Provided, That in the proceedings and deliberation of said appraisers in the process of said appraisement and in the approval thereof the Choctaw and Chickasaw Nations may present for consideration facts, figures, and arguments bearing upon the value of said property. 2 Sec. 2. That after such classification and appraisement has been made each holder of a coal or asphalt lease shall have a right for sixty days, after notice in writing, to purchase, at the appraised value and upon the terms and conditions hereinafter prescribed, a sufficient amount of the surface of the land covered by his lease to embrace improvements actually used in present mining operations or necessary for future operations up to five per centum of such surface, the number, location, and extent of the tracts to be thus purchased to be approved by the Secretary of the Interior: Provided, That the Secretary of the Interior may, in his discretion, enlarge the amount of land to be purchased by any such lessee to not more than ten per centum of such surface: Provided further, That such purchase shall be taken and held as a waiver by the purchaser of any and all rights to appropriate to his use any other part of the surface of such land, except for the purpose of future operations, prospecting, and for ingress and egress, as hereinafter reserved: Provided further, That if any lessee shall fail to apply to purchase under the provisions of this section within the time specified the Secretary of the Interior may, in his discretion, with the consent of the lessee, designate and reserve from sale such tract or tracts as he may deem proper and necessary to embrace improvements actually used in present mining operations, or necessary for future operations, under any existing lease, and dispose of the remaining portion of the surface within such lease free and clear of any claim by the lessee, except for the purposes of future operations, prospecting, and for ingress and egress, as hereinafter reserved. 204 OCTOBER TERM, 1922. Statement of the Case. 262 U. S. allowed the Secretary in case of a lessee’s failing to purchase to reserve to him as much of the surface as the Secretary might deem proper for his mining uses and development. Pursuant to this act, the Secretary classified and appraised the surface of the land which included that covered by the lease of the Coal Company. The Coal Company, however, did not avail itself of the right to purchase but under the authority of the latter part of the section accepted a reservation by the Secretary of a certain part of the surface for its mining operations. The purpose of the Act of February 8, 1918, 40 Stat. 433, already referred to, is shown by its title “An Act Providing for the sale of the coal and asphalt deposits in the segregated mineral land in the Choctaw and Chickasaw Nations, Oklahoma.” Before offering the coal and asphalt deposits for sale, the Secretary was to cause them to be appraised, under such regulations as he should prescribe. All deposits sold were to be subject to the rights of existing lessees, and § 4 contained a provision that any lessee of mining rights should have the preferential right to buy them at the highest price offered for them at public auction—at not less than the appraisement—and that after the appraisement of the mining rights and within ninety days thereof such lessee should have the preferential right to buy the surface rights reserved to him by the Secretary as such lessee “ at the appraised value.” The relator bought the mining rights and then within due time undertook to exercise its preferential right to buy the surface rights reserved to it by the Secretary under the Act of 1912, and made a payment on account of $2,291.76, on the basis of the appraisement under the Act of 1912, which was accepted by the Superintendent of the Five Civilized Tribes and approved by the Secretary of the Interior and retained for fourteen months. When this became known to the Choctaw and Chickasaw Na- work v. McAlester, etc. co. 205 200 Opinion of the Court. tions, their representatives protested and insisted that there must be a new appraisement under the Act of 1918. There was a hearing before the Secretary who reversed his first ruling and held that the relator was entitled to purchase such surface lands only under an appraisement made subsequently to the Act of 1918, and that the money paid under the appraisement of 1912 should be returned to the relator. An appraisement was then ordered by the Secretary under regulations issued by him, at which the price for the surface in respect to which the relator had sought to exercise a preferential right, was fixed at $20,482.60, instead of $9,050.53, which had been the appraisement under the Act of 1912. Mr. H. L. Underwood, with whom Mr. Solicitor General Beck and Mr. Assistant Attorney General Riter were on the brief, for plaintiffs in error. Mr. G. G. McVay and Mr. E. 0. Clark filed a brief on behalf of the Chickasaw and Choctaw Nations, plaintiffs in error. Mr. George M. Porter and Mr. Conrad H. Syme, with whom Mr. John L. Fuller and Mr. James W. Beller were on the brief, for defendant in error. Mr. Chief Justice Taft, after stating the case as above, delivered the opinion of the Court. Two questions are to be decided in this case. The first is under what appraisement the preferential right conferred on the relator by the second section of the Act of 1918 to purchase the surface previously reserved to it by the Secretary of the Interior, was to be exercised. Should it have been under that of the Act of 1912, or under that ordered by the Secretary after the Act of 1918? The second question is whether the construction necessary to determine the first question is vested by the statute in 206 OCTOBER TERM, 1922. Opinion of the Court. 262 U.S. the legal discretion of the Secretary which it is not within the power of the Supreme Court of the District by mandamus to control. First. We have no doubt that the appraisement referred to in the second section of the Act of 1918 under which the preferential right was to be exercised was that provided for in the Act of 1912. It will be observed that the Act of 1912 provided for the sale of the surface lands covering the coal and asphalt deposits of the Choctaws and Chickasaws, and elaborate provisions were made for the appraisement of them. A board of appraisers was to be appointed by the President of the United States, regulations were to be made by the Secretary for the appraisement, and minute requirements were set forth in the first section as to the different classes of such surface lands. More than that, six months’ time was allowed for it and $50,000 was appropriated out of the treasury of the nations to complete the appraisement and sale. By the second section it was attempted to protect the lessees of the minerals in retaining enough surface land to enjoy their leases by giving them short time options to purchase certain percentages of the whole surface and if they did not purchase, by an agreed reservation without purchase of what the Secretary might deem necessary. The object of this legislation was the appraisement, offering, sale and disposition of the surface of the mineral land. The Act of 1918 was enacted not to sell the surface. That had been all disposed of except these agreed reservations by the Secretary specifically provided for in the Act of 1912. The later act was to sell outright the coal and asphalt deposits, much of which had been leased until 1929, subject to such leases. That was its chief purpose. Everything else was incidental. As part of this chief purpose, it provided elaborately for an appraisement of the mineral deposits, just as the Act of 1912 had provided for the appraisement of the surface work v. McAlester, etc. co. 207 200 Opinion of the Court. land. There is nothing in the Act of 1918 as to the appraisal of the reserved surface land except in the two words italicized in the following paragraph, taken from §4: “Any lessee shall have the preferential right, provided the same is exercised within ninety days after the approval of the completion of the appraisement of the minerals as herein provided, to purchase at the appraised value any or all of the surface of the lands lying within such lease held by him and heretofore reserved by order of the Secretary of the Interior.” This paragraph is in the middle of § 4, a section devoted to saving the rights of the lessees of the coal and asphalt deposits from impairment by the sale of such deposits contemplated by the act. It was entirely natural, as such reservation of the surface had been made to preserve the mining opportunities of the lessees under the Act of 1912, that now that it was hoped that the lessees would buy the leased deposits outright under the act, as we may judge from the provision giving them preferential rights to do so contained in the same section, provision should also be made to secure them permanent ownership of that which the Secretary had deemed necessary for their mining under the leases. These privileges extended to the lessees show clearly that this act is in pari materia with all the previous legislation concerning these mineral lands, both as to surface and deposits, and especially with the Act of 1912 as to the surface. This is confirmed by the proviso in § 4 that “ nothing herein contained shall be construed as limiting or curtailing the rights of any lessee or owner of mineral deposits from acquiring additional surface lands for mining operations as provided by the Act of Congress of February 19, 1912.” There is nothing in the Act of 1918 expressly or impliedly authorizing the Secretary to order a reappraise 208 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. ment of the surface land. There is no appropriation for the purpose. If by the words quoted from § 4 of the act it was intended to authorize a new appraisement of the surface reservations, the language would not have been “ the ” appraisement but “ an” appraisement. The use of the definite article means an appraisement specifically provided for. Such an appraisement of the minerals was provided for in the Act of 1918 and this is mentioned in the same sentence in which " the appraisement ” of the surface land is referred to. Construing the Acts of 1912 and 1918 together, the appraisement can only refer to that so elaborately provided for in 1912. Second. We think that the preferential right of relator conferred by § 4 of the Act of 1918 was not to be left to the legal discretion of the Secretary in the construction of that act. There are no words to qualify that which the lessee has as a right granted by the statute, or to vest in the Secretary the final discretion to determine or define that right. Section 7 of the Act of 1918 provides that when the full purchase price for any property sold hereunder is paid, the chief executives of the two tribes shall execute and deliver, with the approval of the Secretary of the Interior, to each purchaser an appropriate patent cohveying to the purchaser the property so sold. This is language of command, and brings the case within Lane v. Hoglund, 244 U. S. 174, and the many cases cited there, and in which this Court quotes from its opinion in Roberts v. United States, 176 U. S. 221, 231, as follows: “ Every statute to some extent requires construction by the public officer whose duties may be defined therein. Such officer must read the law, and he must therefore, in a certain sense, construe it, in order to form a judgment from its language what duty he is directed by the statute to perform. But that does not necessarily and in all cases AMER. FOUNDRIES v. ROBERTSON. 209 200 Syllabus. make the duty of the officer anything other than a purely ministerial one. If the law direct him to perform an act in regard to which no discretion is committed to him, and which, upon the facts existing, he is bound to perform, then that act is ministerial, although depending upon a statute which requires, in some degree, a construction of its language by the officer.” See also Work v. United States ex rel. Mosier, 261 U. S. 352. The decree of the Court of Appeals of the District of Columbia is Affirmed. AMERICAN STEEL FOUNDRIES v. ROBERTSON, COMMISSIONER OF PATENTS, AND SIMPLEX ELECTRIC HEATING COMPANY. APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS. No. 291. Argued April 19, 1923.—Decided May 21, 1923. 1. Under § 9 of the Trade Mark Act, which provides that an applicant for registration of a trade-mark, if dissatisfied with the decision of the Commissioner of Patents, may appeal to the Court of Appeals of the District of Columbia, on complying with’ the conditions required in case of an appeal from the decision of the Commissioner by an applicant for a patent, and that “ the same rules of practice and procedure shall govern in every stage of such proceedings, as far as the same may be applicable,” a party whose application for registration of trade-mark has been rejected by the Commissioner and the Court of Appeals, has the remedy by bill in equity granted to unsuccessful applicants for patent by Rev. Stats., § 4915. P. 212. 2. Held, that the District Court for the Northern District of Illinois had jurisdiction of this suit, against the Commissioner of Patents and an intervening party, to determine the plaintiff’s right to have a trade-mark registered. Reversed. 51826°—23--------14 210 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. Appeal from a decree of the District Court dismissing a bill for registration of trade-mark, for lack of jurisdiction. Mr. George L. Wilkinson, with whom Mr. Henry M. Huxley was on the brief, for appellant. Mr. Solicitor General Beck and Mr. Assistant Attorney General Lovett submitted the case without brief or argument, on behalf of the Commissioner of Patents, appellee. Mr. Nathan Heard for Simplex Electric Heating Company, appellee. Mr. Chief Justice Taft delivered the opinion of the Court. This is a direct appeal under § 238 of the Judicial Code from a decree of the District Court of the United States for the Northern District of Illinois dismissing a bill in equity. The District Judge certifies that the motion to dismiss the bill was sustained solely for lack of jurisdiction. The bill was filed by the appellant, the American Steel Foundries, against the Commissioner of Patents to secure an adjudication that the appellant is entitled to have its trade-mark “ Simplex ” registered and authorizing the Commissioner of Patents to register the same. The Commissioner appeared as defendant and by stipulation the Simplex Electric Heating Company was allowed to intervene as the real party in interest. The bill averred that the American Steel Foundries had duly filed an application in the Patent Office for the registration, that the Examiner of Trade Marks had refused the application, that the Commissioner of Patents had affirmed this refusal, and that, on appeal, the Court of Appeals of the District of Columbia had affirmed the action of the Commissioner, that a petition for certiorari had been filed in this Court and granted, and that thereafter the cause AMER. FOUNDRIES v. ROBERTSON. 211 209 Opinion of the Court. was dismissed by this Court for lack of jurisdiction, on the ground that the decree of the Court of Appeals was not a final one. The appellant then filed this bill under § 9 of the Trade Mark Act of February 20, 1905, c. 592, 33 Stat. 724, and § 4915, Rev. Stats. The intervener based its motion to dismiss on the lack of jurisdiction “ over the subject matter or alleged cause of action,” and the motion was granted without opinion. Section 9 of the Trade Mark Act reads as follows: “ Sec. 9. That if an applicant for registration of a trade-mark, or a party to an interference as to a trademark, or a party who has filed opposition to the registration of a trade-mark, or party to an application for the cancellation of the registration of a trade-mark, is dissatisfied with the decision of the Commissioner of Patents, he may appeal to the court of appeals of the District of Columbia, on complying with the conditions required in case of an appeal from the decision of the Commissioner by an applicant for a patent, or a party to an interference as to an invention, and the same rules of practice and procedure shall govern in every stage of such proceedings, as far as the same may be applicable.” Section 4915 of the Revised Statutes reads as follows: “ Sec. 4915. [Patents obtainable by bill in equity.] Whenever a patent on application is refused, either by the Commissioner of Patents or by the Supreme Court of the District of Columbia upon appeal from the Commissioner, the applicant may have remedy by bill in equity; and the court having cognizance thereof, on notice to adverse parties and other due proceedings had, may adjudge that such applicant is entitled, according to law, to receive a patent for his invention, as specified in his claim, or for any part thereof, as the facts in the case may appear. And such adjudication, if it be in favor of the right of the applicant, shall authorize the 212 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. Commissioner to issue such patent on the applicant filing in the Patent-Office a copy of the adjudication, and otherwise complying with the requirements of law. In all cases, where there is no opposing party, a copy of the bill shall be served on the Commissioner; and all the expenses of the proceeding shall be paid by the applicant, whether the final decision is in his favor or not.” The question in this case is whether the closing words of § 9 “ and the same rules of practice and procedure shall govern in every stage of such proceedings, as far as the same may be applicable ”, are broad enough in their scope to include the 11 remedy by bill in equity ” granted to unsuccessful applicants for a patent in § 4915. In Gandy v. Marble, 122 U. S. 432, an unsuccessful applicant for a patent who had carried his application by appeal to the Supreme Court of the District, which was dismissed on its merits January 30, 1880, on May 3, 1883, filed a bill in equity in the District Supreme Court under § 4915 against the Commissioner of Patents. That court dismissed the bill on the ground that the applicant had failed to prosecute his application within two years after the dismissal of his appeal from the Commissioner by the Supreme Court of the District, basing it on § 4894 of the Revised Statutes, reading as follows: “ Sec. 4894. All applications for patents shall be completed and prepared for examination within two years after the filing of the application, and in default thereof, or upon failure of the applicant to prosecute the same within two years after any action therein, of which notice shall have been given to the applicant, they shall be regarded as abandoned by the parties thereto, unless it be shown to the satisfaction of the Commissioner of Patents that such delay was unavoidable.” This section applies to proceedings in the Patent Office and before the Commissioner, and it was pressed upon this Court that it could not apply to such an independent AMER. FOUNDRIES v. ROBERTSON. 213 209 Opinion of the Court. proceeding as the bill in equity provided for in § 4915. But this Court held that § 4894 did apply. Mr. Justice Blatchford, speaking for the Court, admitted (p. 439), following Butterworth n. Hoe, 112 U. S. 50, 61, that the proceeding by bill in equity, under § 4915 “ intends a suit according to the ordinary course of equity practice and procedure, and is not a technical appeal from the Patent Office, nor confined to the case as made in the record of that office, but is prepared and heard upon all competent evidence adduced and upon the whole merits,” but continued, “ yet the proceeding is, in fact and necessarily, a part of the application for the patent.” He summed up the conclusion of the Court as follows (p. 440): “ The presumption of abandonment, under § 4894, unless it is shown that the delay in prosecuting the application for two years and more after the last prior action, of which notice was given to the applicant, was unavoidable, exists as fully in regard to that branch of the application involved in the remedy by bill in equity as in regard to any other part of the application, whether so much of it as is strictly within the Patent Office, or so much of it as consists of an appeal to the Supreme Court of the District of Columbia under § 4911. The decision of the court on a bill in equity becomes, equally with the judgment of the Supreme Court of the District of Columbia on a direct appeal under § 4911, the decision of the Patent Office, and is to govern the action of the Commissioner. It is, therefore, clearly a branch of the application for the patent, and to be governed by the rule as to laches and delay declared by § 4894 to be attendant upon the application.” This view of the intimate relation of the bill in equity allowed in § 4915 to the application for a patent and the practice and procedure provided in due course thereof is of much assistance in giving proper scope to the words of § 9 of the Trade Mark Act. After making provision for 214 OCTOBER TERM, 1922. Opinion of the Court. 262U.S. an appeal to the District Court of Appeals from a simple refusal of registration, and from decisions of the Patent Office in three different kinds of adversary proceedings therein in respect of such registration, on complying with the conditions required in case of an appeal from refusal of a patent or a decision in a patent interference proceeding, the words are “ and the same rules of practice and procedure shall govern in every stage of such proceedings, as far as the same may be applicable.” If the bill in equity of § 4915 is only a part of the proceeding for an application for a patent as held in Gandy v. Marble, it is no straining of the language to make these words include a bill in equity for the registration of a trade-mark. This Court has taken exactly this view in Atkins & Co. v. Moore, 212 U. S. 285. In that case it was held that a decision of the Court of Appeals of the District of Columbia affirming the decision of the Commissioner of Patents refusing registration of a trade-mark on an appeal under § 9 of the Trade Mark Act was not a final judgment of the Court of Appeals which could be appealed to this Court, and in the argument to show that it was not, Chief Justice Fuller, who spoke for the Court, said (p. 291): “ Under § 4914 of the Revised Statutes no opinion or decision of the Court of Appeals on appeal from the Commissioner precludes ‘ any person interested from the right to contest the validity of such patent in any court wherein the same may be called in question,’ and by § 4915 a remedy by bill in equity is given where a patent is refused, and we regard these provisions as applicable in trademark cases under § 9 of the Act of February 20, 1905.” This language is quoted with approval in the opinion of this Court in Baldwin Co. v. Howard Co., 256 U. S. 35, in which it was held that there could be no review in this Court, by appeal or certiorari, of a decision of the District Court of Appeals in respect to the registration of a trademark under § 9 of the Trade Mark Act. CURTIS CO. v. UNITED STATES. 215 209 Syllabus. It is pressed upon us, however, that this language in Atkins & Co. v. Moore and in Baldwin Co. v. Howard Company, was not necessary to the conclusion in those cases and is to be regarded as obiter dictum. It was used in arguendo and was the unanimous expression of the Court in both cases. It may be that the conclusion that the decision of the Court of Appeals was not final and appealable to this Court could have been reached without this argument; but, however this may be, the Construction put by the Court on § 9 is most persuasive and follows so clearly from the decision in Gandy v. Marble, that we find no reason to question its correctness. An argument has been made to us against giving such an effect to § 9 based on the intrinsic differences between the nature of the patent right, and that in a trade-mark. We do not regard such differences as important in interpreting § 9 when it is obvious from that section and the whole of the Trade Mark Act that Congress intended to produce a parallelism in the mode of securing these two kinds of government monopoly from the Patent Office. The decree of the District Court is reversed and the case is remanded for further proceedings. CURTIS, COLLINS & HOLBROOK COMPANY v. UNITED STATES. (And Twenty-three Other Cases.) APPEALS FROM THE CIRCUIT COURT OF APPEALS FOR THE NINTH CIRCUIT. No. 341, and Nos. 342-364. Argued April 9, 10, 1923.—Decided May 21, 1923. 1. Where stockholders of a corporation, imposing no safeguard other than that the paper titles should be passed on by a reputable attorney, entrusted another stockholder, who was also vice president and active manager of the company, with the business of 216 OCTOBER TERM, 1922. Statement of the Case. 262 U. S. procuring title to lands, to be patented under the Timber and Stone Act, for which he was to be paid a stated sum per acre, and where lands were so procured, by means of frauds on the act, of which the person thus acting as agent for all had knowledge, and by means of conveyances from the fraudulent entrymen to a naked trustee and from the trustee to the corporation, held, that the knowledge of the agent was imputable to the corporation and all its shareholders, and that the defense of bona fide purchaser was not available to the corporation in a suit by the United States to annul the patents because of the fraud. P. 221. 2. Where an agent employed to procure titles to land, procures it, contrary to his instructions, through a fraud practiced on the owner, the fact that the agent has an adverse or independent interest in that, having a share in the adventure, his own profits will increase with the number of titles procured, cannot save his principal from imputation of the agent’s knowledge in a suit by the landowner to set aside the conveyances because of the fraud. P. 223. American National Bank v. Miller, 229 U. S. 517, distinguished. 3. The defense of bona fide purchaser is an affirmative one, and the burden of sustaining it rests upon the party who asserts it. P. 225. 275 Fed. 670 and 674, affirmed. In November, 1912, the United States filed seventy-nine bills in the District Court of the United States for the Northern District of California, seeking to set aside patents for land in the Susanville land district in California, issued by it under the Timber & Stone Act (Act of Congress, June 3, 1878, c. 151, 20 Stat. 89, as amended by Act of August 4, 1892, c. 375, § 2, 27 Stat. 348), to various patentees and by them conveyed to one Gregory, and by him to the Curtis, Collins & Holbrook Company, a corporation of California, on the ground that the patents had been obtained by fraud. The entries were filed and the patents were issued in the last six months of the year 1902, and shortly thereafter. The cases were consolidated into groups, were referred to a Master who reported at length, finding that, as to the seventy-nine patents, only twenty-four had been obtained in fraud of the United CURTIS CO. v. UNITED STATES. 217 215 Statement of the Case. States and in violation of the statute, but that as to all of these, the Curtis, Collins & Holbrook Company was a bona fide purchaser for value without notice of the fraud. The District Court sustained the findings of the Master and dismissed the bills. The United States then prosecuted appeals as to the twenty-four patents whose issue had been found by the Master to have been obtained by fraud, to reverse the finding by the Master and the District Court, that the Curtis, Collins & Holbrook Company was a bona fide purchaser without notice of the fraud. The Circuit Court of Appeals of the Ninth Circuit, to which the appeals were taken, found with the Government on this issue, reversed the decree of the District Court in the twenty-four cases, and remanded them with direction to cancel the patents. The Curtis, Collins & Holbrook Company has now prosecuted appeals to this Court in all these twenty-four cases, under § 241 of the Judicial Code. The parties, as the Master did below, selected as a typical case, of the twenty-four cases in which fraud was found, the patent issued to one Edward L. Cooksey. That has been argued in this Court, with the understanding that the other twenty-three cases are to abide the decree in this, because the facts, so far as notice of the fraud is concerned, are substantially the same. In 1901, persons owning lands within the limits of the National Forests, could convey, them to the United States and select in lieu thereof, and secure title by patent to, timber lands belonging to the United States outside of the forest reservations. One Tuman and C. H. Holbrook agreed to seek capitalists and induce them to purchase lands in forest reservations and exchange them for timber land outside. Tuman was a cruiser who had prepared a list of desirable lieu lands which could be selected. In December, 1901, (Holbrook made a contract with Curtis and Collins by which he agreed to sell to them at $7.50 an acre forty-two thousand acres of timber land in Cali- 218 OCTOBER TERM, 1922. Statement of the Case. 262 U. S. fomia—described in a schedule—title to which Holbrook was to obtain by conveying to the United States lands of the same amount in National Forest reservations. The forest reservation lands were to be conveyed to Thompson, trustee, by the owners, who were to be paid upon request of Holbrook and on an attorney’s certificate of title, not exceeding $5.00 an acre, to be paid by the Bank of California out of a fund of $200,000 deposited with it by Curtis and Collins. The trustee was then to make application for the lieu lands described in the list and when he had acquired title he was, upon notice from Holbrook that he had been paid, to convey to Curtis and Collins or to anyone to whom they directed. After the title to the whole amount had been acquired, Holbrook was to receive the balance of the price for the lands amounting to more than $115,000, partly in cash and promissory notes and in 789 shares of stock in a corporation of California to be formed with 5,000 shares of $100 par value each, to which the lands were to be conveyed. Curtis and Collins were to receive 3,156 shares, 1,844 shares remaining in the treasury, out of which Holbrook’s shares were to be taken. Holbrook was to be a director and vice-president and general manager. If Holbrook could not secure the whole of the 42,000 acres from the forest reserve rights, he was given the right to obtain it through any other legal means or source. Holbrook and his son, with Tuman’s assistance, procured the whole 42,000 acres in lieu of forest reservation lands. Holbrook reported to Curtis and Collins that forest reservation lands had become scarce and expensive and suggested that there were valuable timber lands which could be secured under the Stone & Timber Law ubi supra. Under this law, land belonging to the United States, valued chiefly for timber or stone, and unfit for cultivation, in quantities not exceeding 160 acres, could be sold to a citizen of the United States at a minimum CURTIS CO. v. UNITED STATES. 219 215 Statement of the Case. price of $2.50 an acre. But any person seeking such land was required to file with the register of the proper district a written statement, under oath, in duplicate, setting forth a number of necessary facts concerning the land and also that he “ has made no other application under this act; that he does not apply to purchase the same on speculation, but in good faith to appropriate it to his own exclusive use and benefit; and that he has not, directly or indirectly, made any agreement or contract, in any way or manner, with any person or persons whatsoever, by which the title which he might acquire from the government of the United States should inure, in whole or in part, to the benefit of any person except himself.” Curtis and Collins accepted Holbrook’s suggestion as to the Stone & Timber Law, and it was orally agreed that about 30,000 acres should be thus acquired and that Holbrook was to be paid $10.00 an acre. The entries in this and the other twenty-three cases were procured by agents of Tuman, who made entries under an agreement to convey the lands to anyone he might direct, he paying all the expenses and $100 for each entry, and the entrymen making false oaths in violation of the statute. The land thus entered was conveyed by the entrymen to one Gregory whose name was used with his consent as trustee by Tuman and Holbrook. Gregory neither paid nor received any money and merely acted as a conduit for the titles. All the stone and timber entries were filed in the last six months of 1902, and the deeds to Gregory were made soon after proof by the entrymen, but were not recorded until 1904. The Curtis, Collins & Holbrook Company was organized in accord with the terms of the original contract, August 14, 1902, the incorporators being J. G. Curtis and his son, D. G. Curtis, T. D. Collins and his son, E. S. Collins, Charles H. Holbrook, and his son, Charles H. Holbrook, Jr., and Irving 220 OCTOBER TERM, 1922. Statement of the Case. 262 U. S. F. Moulton. Gregory conveyed to this corporation the interests conveyed to him by the entrymen at different times up to 1904, but none of the deeds to the corporation was recorded until October, 1909, and some were not recorded until 1910 and 1911. Curtis and Collins lived in Pennsylvania but they, together with Tuman and Holbrook, went out to look at the lands in 1902, after the contract was made. D. G. Curtis, who was treasurer of the Company, also frequently went upon the lands. Young Curtis testified that he talked much with Holbrook who managed the Company and did everything in connection with the acquisition of these lands by it and that they all had the utmost confidence in his getting them good titles. Tuman and Holbrook fell out as to the division of the profit between them. Collins, Sr., effected a compromise whereby Tuman received 200 shares in the Company and $10,000 cash; and after this litigation was begun Collins paid Tuman $750 a share for this stock, although it was twice what it was worth as Collins admitted. Tuman was a witness and testified that he told Holbrook what he had done in procuring the entries to be made and in paying expenses and the $100 apiece to the entrymen, and there was evidence strongly tending to show that the money used to pay these expenses came from an account in a San Francisco bank, opened by Holbrook in the name of Collins and Holbrook, upon which checks were drawn in favor of an account in Holbrook’s name in a bank at Susanville upon which Tuman drew checks for this work. There was no evidence that Collins knew of the San Francisco account in the name of. Collins and Holbrook. There was evidence that in 1904 and 1906, land office agents were investigating the validity of entries made as to other lands suspected of having been sold in advance to the Curtis, Collins & Holbrook Company, and that Tuman, Holbrook and Collins talked over CURTIS CO. v. UNITED STATES. • 221 215 Opinion of the Court. the matter, and that Collins agreed they were lost and “ that was all there was to it.” Mr. Charles A. Shurtleff, with whom Mr. Robert B. Gaylord and Mr. Morris R. Clark were on the brief, for appellant. Mr. S. W. Williams, Special Assistant to the Attorney General, with whom Mr. Solicitor General Beck and Mr. Assistant Attorney General Riter were on the brief, for the United States. Mr. Chief Justice Taft, after stating the case as above, delivered the opinion of the Court. The Circuit Court of Appeals attached importance to the conduct of Collins toward Tuman and the compromise made between him and Holbrook, to his willingness to abandon other titles secured by Holbrook when questioned, and to the long delay in recording the deeds to the Company (Linn & Lane Timber Co. v. United States, 236 U. S. 574, 576) as suspicious circumstances indicating a consciousness on the part of the capitalists in the Company that the titles of the Company to the lands here in question were vulnerable because of the practices of Holbrook and Tuman. Without minimizing the significance of these circumstances, we put our concurrence in the decree of the Circuit Court of Appeals on the other ground stated by that court. While the contract of December, 1921, called it a sale of 42,000 acres of forest reservation lieu lands by Holbrook to Curtis and Collins, we think that in the light of all the circumstances, it was rather a contract of agency and joint adventure by which Holbrook was to procure the land for his principals at a stipulated profit for himself, they to furnish the money with which he could make the purchases for them. Even if the written contract 222 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. would not bear this construction, the practical construction by the parties justifies it; and this is especially true of the subsequent oral contract under which the additional 30,000 acres of stone and timber land was to be purchased. The title to the land was never put in Holbrook, or in Curtis and Collins. Through a naked trustee, it was conveyed directly from the entrymen to the Company. The whole procedure under the Stone & Timber Act was entrusted by Curtis and Collins to the initiation and execution of Holbrook as the manager and vice president of the Company, in which Curtis and Collins had three-fifths interest, and Holbrook had one-sixth. The only safeguard imposed was that a reputable attorney was to pass on the paper title. The Company was in being and under the active management of Holbrook when these entries were being made and final proof submitted. Holbrook knew of the fraud practiced on the Government in making the entries, because Tuman says that he told him, and the circumstances as to the payment of money for expenses and bonuses out of moneys furnished by Holbrook confirms his complicity in it. Under these circumstances, we do not think the Company can be treated as a bona fide purchaser. It is charged with Holbrook’s knowledge because he was the sole actor for the Company in procuring the fraudulent patents. It sufficiently appears that young Curtis, the treasurer of the Company, and Curtis and Collins, the capitalists, understood the difference there was between the procedure and limitations attending the acquisition of title to lands under the Forest Reservation Act and under the Stone & Timber Law, and that they depended wholly on Holbrook to secure a good title under the latter act. The general rule is that a principal is charged with the knowledge of the agent acquired by the agent in the course of the principal’s business. Here the business was CURTIS CO. v. UNITED STATES. 223 215 Opinion of the Court. the acquisition of land patented by the Government under the Stone & Timber Act. The Company and all its stockholders were charged with notice of any facts impairing the titles, of which in securing them, Holbrook was advised. In other words, the Company in taking over the titles took them cum onere. Hovey v. Blanchard, 13 N. H. 145; Warren n. Hayes, 74 N. H. 355; Atlantic Cotton Mills v. Indian Orchard Mills, 147 Mass. 268, 273; Bank of New Milford v. Town of New Milford, 36 Conn. 93, 101; Holden v. New York & Erie Bank, 72 N. Y. 286, 294; First National Bank v. Dunbar, 118 Ill. 625, 632; Fouche v. Merchants National Bank, 110 Ga. 827, 848; Wilson v. Pauly, 72 Fed. 129, 135; Mechem on Agency, 2d ed., Vol. 2, § 1818. Appellants seek to avoid the application of this principle by asserting an exception to it when the agent’s attitude is one adverse in interest to that of the principal, because of which it can not be inferred that the agent would communicate the facts against his own interest to his principal. The case relied on to establish this exception is that of American National Bank v. Miller, 229 U. S. 517. In that case one who was president of a bank at Macon, Georgia, owed his own bank $3,000, and paid it by a check on a Nashville bank in which he was a depositor, but which he owed $50,000. The Nashville bank received the check from the Macon bank for collection and then credited the Macon bank with the amount and sent a letter advising the Macon bank. The president of the Macon bank was insolvent and a petition of involuntary bankruptcy was filed against him the day his check was credited by the Nashville bank. The Nashville bank sought to charge off the credit to the Macon bank on the ground that that bank was chargeable with notice of its president’s insolvency. We held that such knowledge could not be imputed to the Macon bank merely because the president knew it, for the reason that it was not to be 224 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. inferred that he would communicate such knowledge to his own bank. We do not think the case applicable here. The president of the Macon bank was engaged in something in which his interest was plainly independent of any agency of his on behalf of his bank. His payment of his note was his own business, and not the bank’s as his principal. In the case at bar, Holbrook was the sole agent acting for the Company in securing titles to land for it. It is true that the more titles he got the more profit he would make out of the agency, and we may assume that as between him and the Company in securing fraudulent titles for the Company, he was violating his instructions; but he and the Company were in a common adventure, and if the Company insists on retaining the fruits of that adventure, it must be charged with the knowledge of the agent through whom the fruits came. The interest of Collins, Curtis and Holbrook in the acquisition of the titles was common. Curtis and Collins knew exactly how far Holbrook’s interest was adverse to theirs, but trusted him in the joint enterprise notwithstanding. The adverse interests as between them in sharing the fruits of the common business can not enable the Company to retain its share and repudiate the agent with all he knew. This view is sustained by the authorities above cited; it was taken by the Circuit Court of Appeals and we concur in it. Appellant relies on the cases of the United States v. Detroit Timber & Lumber Co., 200 U. S. 321, and United States v. Clark, 200 U. S. 601, to justify the plea of bona fide purchase in this case. The facts in those cases were different from the facts in the case before us. In the Detroit Company Case, there was no question of agency at all. It was the purchase by one company from another and it was sought to charge the purchasing company with knowledge of the vendor’s violations of the statute by CURTIS CO. v. UNITED STATES. 225 215 Opinion of the Court. assuming that if the purchaser had looked into its books it might have inferred something irregular. The Court held that there was nothing to put the purchaser on such an inquiry. In the Clark Case, Clark bought outright from Cobban by direct warranty deeds lands patented under the Stone & Timber Act. It did appear that Cobban had negotiations with Clark before Cobban acquired title to some of the land, and it further appeared that Clark lent money to Cobban secured by mortgage on land and timber owned by Cobban to enable him to buy additional land. But this Court and the two lower courts held that Clark and Cobban dealt at arm’s length. We found expressly that the claim that Cobban was Clark’s agent broke down. These two cases were seemingly relied upon by the Master and the District Court to show that the defense of bona fide purchaser is not an affirmative defense, the burden of sustaining which is on the defendant; but such a construction of those cases is refuted by the express ruling of this Court in Wright-Blodgett Co. v. United States, 236 U. S. 397. We think the case before us comes within the class of cases of which McCaskill Co. v. United States, 216 U. S. 504, and United States v. Kettenbach, 208 Fed. 209, 219, are instances. Decree affirmed in this and the other twenty-three cases. 51826°—23------15 226 OCTOBER TERM, 1922. Syllabus. 262 U. S. WAGNER ELECTRIC MANUFACTURING COMPANY v. LYNDON ET AL. APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF MISSOURI. No. 738. Motion to dismiss submitted April 30, 1923.—Decided May 21, 1923. 1. Where the District Court dismissed a bill on the ground that the constitutional questions relied on were too unsubstantial to confer jurisdiction, without passing on defendant’s further objection that the bill sought to enjoin proceedings n a state court contrary to Jud. Code, § 265, the only appeal allowed by law was to this Court under Jud. Code, § 238, on the ground that the sole issues involved were those involving the application or construction of the Constitution or the jurisdiction of the District Court. P. 230. 2. The Act of September 14,1922, c. 305, 42 Stat. 837, providing that, if a case is taken, by appeal or writ of error, to the Circuit Court of Appeals, which should have been taken to this Court, the appeal or writ of error shall not for that reason be dismissed, but shall be transferred to the proper court and there be disposed of as if the appeal or writ of error had been properly taken, was applicable to a case in which the Circuit Court of Appeals had rendered a final decree of affirmance before the date of the act, but which remained pending before that court on a petition for rehearing. P. 230. 3. When a case from the District Court which should have been brought here directly was taken to the Circuit Court of Appeals, and then, by appeal from its decision, to this Court, and here submitted for decision on the merits, by a motion to dismiss or affirm and accompanying briefs, held, that it was not necessary to remand it to the Circuit Court of Appeals for transfer under the Act of September 14, 1922, supra, but that it might be treated as though it had been so transferred. P. 231. 4. The proposition that, in a collateral attack upon the validity of a judgment of a state court, a federal court can examine the evidence to see whether a direction by the court to a jury to find a verdict was justified by the evidence, is frivolous. P. 231. WAGNER CO. v. LYNDON. 227 226 Counsel for Parties. 5. The deprivation of a right of trial by jury in a state court does not deny the parties due process of law under the Federal Constitution. P. 232. 6. When the state constitution provides that a court shall consist of four judges and that a majority thereof shall constitute a quorum, and review by four judges is given, and an opinion is rendered by three of them, constituting the quorum, the mere fact that the fourth did not hear the oral argument but wrote the opinion on the printed arguments, is at most an irregularity which does not affect the validity of the judgment. P. 232. 7. Where the state constitution provided for a court in two divisions, and a case was disposed of by one of those divisions, and the losing party’s motion to transfer the case to the court in banc, because a federal question was involved and it was therefore under the state constitution entitled to a hearing by the full court, was denied, and the propriety of the decision in the state court was questioned in the federal court on this ground, held, that the question of the right to the transfer was one of state law upon which the federal courts were bound to accept the decision of the state court. P. 232. 8. When the history of the case and the conduct of the appellant left no doubt that the litigation and successive appeals were prosecuted solely for delay and the case was dismissed by this Court for lack of jurisdiction because the grounds of appeal were frivolous, the appellee was awarded $1,500 as damages for delay, and costs, as upon an affirmance of the decree of the District Court. Rev. Stats., §§ 1010, 1012. P. 232. Appeal to review 282 Fed. 219, dismissed. Appeal from a decree of the Circuit Court of Appeals affirming a decision of the District Court which dismissed the bill in a suit to hold a sheriff as trustee of money paid under an execution issued on a judgment of a state court, and to enjoin him from paying it to the judgment creditor, Lyndon, and the latter from receiving it. Mr. Charles A. Houts, Mr. Albert Blair and Mr. Thomas J. Cole for appellant. Mr. Lawrence C. Kingsland, Mr. John D. Rippey and Mr. Clarence T. Case for appellees. 228 OCTOBER TERM, 1922. Opinion of the Court, 262 U. S. Mr. Chief Justice Taft delivered the opinion of the Court. This is a motion to dismiss or affirm by the appellees in an appeal from the decree of the Circuit Court of Appeals of the Eighth Circuit. The record discloses the following: On May 10, 1917, the appellee Lamar Lyndon brought suit in the Circuit Court of the City of St. Louis, Missouri, against the appellant, the Wagner Electric Manufacturing Company, to recover royalties on a patent owned by Lyndon alleged to be due under a contract between the parties. A trial before a jury was had, in which evidence was introduced by both sides, and at the close of all the evidence, the court directed a verdict for the plaintiff, and judgment followed for $12,029.50. The Wagner Company appealed from this judgment to the Supreme Court of Missouri, where it was duly assigned for hearing in Division No. 1 of that court under a provision of the constitution of Missouri that the Supreme Court shall consist of seven judges and shall be divided into two divisions, one to consist of four judges known as Division No. 1, a majority thereof to constitute a quorum and its judgments as to causes and matters before it to have the force and effect of law. On January 21st, the appeal was argued before three of the judges of Division No. 1, and printed arguments were filed by both parties. Judgment was subsequently rendered by the four judges, the opinion being written and filed, with the concurrence of the other three judges, by Judge Woodson of the Division. Judge Woodson had not heard the oral argument. The Wagner Company filed a motion for rehearing and a motion to transfer the cause to the court in banc, which were denied. The Wagner Company then applied to this Court for a writ of certiorari to review the judgment pf the Mis- WAGNER CO. v. LYNDON. 229 226 Opinion of the Court. souri Supreme Court, which was denied in April, 1921. Wagner Electric Mfg. Co. n. Lyndon, 256 U. S. 690. Thereafter on a mandate from the Supreme Court of Missouri, the State Circuit Court issued execution against the Wagner Company on the judgment. The sheriff made a levy on the real property of the Wagner Company, which filed a bill in the United States District Court for the Eastern District of Missouri, against Lyndon and the sheriff, seeking an injunction against their proceeding with the execution. Application for a preliminary injunction on this bill was denied by the District Court. The Wagner Company then paid the judgment and costs amounting to $15,015.29 to the sheriff, and at once brought the present bill in the United States District Court against Lyndon and the sheriff seeking to hold the sheriff as trustee in his custody of the fund, and to enjoin him from paying the money to Lyndon, and Lyndon from receiving it. The jurisdiction was asserted on the ground that the case was one arising under the Constitution of the United States. The District Court heard the case and dismissed the bill. The Wagner Company then appealed to the Circuit Court of Appeals which affirmed the decree of the District Court. The grounds urged in behalf of the relief sought in the District Court, the Circuit Court of Appeals and this Court were, first, that the action of the Circuit Court of St. Louis in directing a verdict for plaintiff without evidence to warrant such action, deprived the defendant, the Wagner Company, of its property without due process of law and denied it the equal protection of the laws; second, that the action of Division No. 1 of the Missouri Supreme Court in hearing the case on appeal with three judges and allowing a fourth, who did not hear the oral argument, to take part in the decision and write the opinion, and the refusal of Division No. 1 of the Supreme Court of Missouri to transfer the cause to be heard by 230 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. the Supreme Court in banc, as required by the law of Missouri when a federal question is involved, deprived the Wagner Company of its property without due process of law and denied it the equal protection of the laws. Defendant Lyndon ifioved to dismiss the complaint because the court was without jurisdiction, there being no substantial federal question and because the bill sought an injunction to stay proceedings in a state court contrary to § 265 of the Judicial Code. The District Court dismissed the bill on the first ground. No other questions were presented to the District Court. The only appeal from its decision allowed by law was, therefore, to this Court under § 238, on the ground that the sole issues involved were those involving the application or construction of the Constitution or the jurisdiction of the District Court. American Sugar Refining Co. v. New Orleans, 181 U. S. 277-281; Huguley Mjg. Co. v. Galeton Cotton Mills, 184 U. S. 290, 295; Union Planters’ Bank v. Memphis, 189 U. S. 71, 73; Vicksburg v. Vicksburg Waterworks Co., 202 U. S. 453, 458; Carolina Glass Co. v. South Carolina, 240 U. S. 305, 318; Raton Water Works Co. v. City of Raton, 249 U. S. 552, 553. Such a case could not be taken to the Circuit Court of Appeals and, except for legislation enacted by Congress September 14, 1922, it would have been the duty of that court to dismiss it for want of jurisdiction. Except for that legislation, it would now be our duty to reverse the decree of that court with direction to dismiss the appeal. The Assessors v. Osbornes, 9 Wall. 567, 575; Mansfield, C. & L. M. Ry. Co. v. Swan, 111 U. S. 379, 388-389; Blacklock v. Small, 127 U. S. 96, 105; Union & Planters’ Bank v. Memphis, 189 U. S. 71, 73; Carolina Glass Co. v. South Carolina, 240 U. S. 305, 318; The Carlo Poma, 255 U. S. 219, 220-221. The legislation of September 14, 1922, referred to (42 Stat. 837, c. 305), provides that if an appeal or writ of error has been or shall be taken to, or issued out of any WAGNER CO. v. LYNDON. 231 226 Opinion of the Court. circuit court of appeals in a case wherein such appeal or writ of error should have been taken to, or issued out of, the Supreme Court, such appeal or writ of error shall not for such reason be dismissed, but shall be transferred to the proper court, where it shall be disposed of as if the appeal or writ of error had been properly taken. The decree of affirmance in the**Circuit Court of Appeals was entered on July 7, 1922, but a petition for rehearing was filed and that petition was not denied until September 18, 1922, or four days after the passage of the foregoing act. Before the decree of affirmance became finally the act of the Circuit Court of Appeals, this law came into force, and, however that may be, it is in force now to govern us in the direction which we, in reversing the decree of affirmance, should give to that court. That direction should be to transfer the case to this Court to which it should have been brought by direct appeal from the District Court under § 238 of the Judicial Code. The case is here on an appeal allowed by a judge of the Circuit Court of Appeals. The case has been submitted to us on the motion to dismiss or affirm which is a hearing on the merits. All parties have filed briefs. Is it necessary for us to go through the idle form of remanding it to the Circuit Court of Appeals to enable that court to transfer it back to us for a second consideration? Certainly such unnecessary consumption of time and labor is not in the spirit of the Act of September 14, 1922. Having the case here, and having heard it on the merits, we think we may properly consider that done which ought to have been done, treat the case as here by appeal from the District Court, and dispose of it, as we would do if the Circuit Court of Appeals had formally transferred it to us. The only grounds urged by the appellant for a reversal of the decree dismissing the bill of complaint are frivolous and without merit. The first involves the proposition that in a collateral attack upon the validity of a judgment 232 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. in a state court, a federal court can examine the evidence to see whether a direction by the court to a jury to find a verdict was justified by the evidence. This would be to make such an attack serve the purpose of a writ of error. More than this, even if it were held that the direction deprived the defendant of the right of trial by jury (a holding shown to be erroneous by Treat Manufacturing Co. v. Standard Steel & Iron Co., 157 U. S. 674), still the deprivation of a right of trial by jury in a state court does not deny the parties due process of law under the Federal Constitution. Walker v. Sauvinet, 92 U. 8. 90; Missouri v. Lewis, 101 U. S. 22, 31; Twining v. New Jersey, 211 U. S. 78, 110, 111; Minneapolis & St. Louis R. R. Co. v. Bombolis, 241 U. S. 211, 217. The second ground is equally unsubstantial. The machinery for review of the judgments of courts of first instance is wholly within the control of the state legislature—Missouri v. Lewis, 101 U. S. 22, 30—and when the review by four judges is given, and an opinion is rendered by three of them, constituting the quorum, the mere fact that the fourth did not hear the oral argument but wrote the opinion on the printed arguments is at most an irregularity which does not in the slightest degree affect the validity of the judgment. The contention that Wagner was entitled under the Missouri constitution to have the cause heard before a full court because a federal question was involved, is wholly without merit, because the question of the right to transfer was a question of Missouri law upon which we are bound to accept the decision of the Missouri courts. Missouri v. Lewis, 101 U. S. 22. We are asked by counsel for appellees to impose a penalty on the appellant for delay. The history of the case and the conduct of the Wagner Company leave no doubt that the litigation in the federal jurisdiction and the successive appeals have been prosecuted solely for delay. Have we power to impose damages in this case? WAGNER CO. v. LYNDON. 233 226 Opinion of the Court. Section 1010 of the Revised Statutes provides as follows: “ Sec. 1010. Where, upon a writ of error, judgment is affirmed in the Supreme Court or a circuit court, the court shall adjudge to the respondents in error just damages for his delay, and single or double costs, at its discretion.” Section 1012 has the effect to make § 1010 applicable to appeals in equity. The second paragraph of the 23rd Rule of this Court provides that: “ In all cases where a writ of error shall delay the proceedings on the judgment of the inferior court, and shall appear to have been sued out merely for delay, damages at a rate not exceeding 10 per cent., in addition to interest, shall be awarded upon the amount of the judgment.” The third paragraph is: “ The same rule shall be applied to decrees for the payment of money in cases in equity, unless otherwise ordered by this court.” An objection to allowing damages in the present case suggesting itself is that the decree appealed from was not a money judgment. It is true that this whole litigation in the federal jurisdiction has been initiated and carried on solely to secure the delay of the payment of a money judgment in the state court, but that is hardly within the exact terms of the 23rd Rule. Sections 1010 and 1012, Rev. Stats., are, however, not so restrictive and they give this Court power to impose just damages upon the affirmance of any judgment or decree, for delay. Gibbs v. Diekma, 131 U. S. Appendix clxxxvi. The case should be dismissed for lack of jurisdiction because the grounds of appeal are frivolous. In a dismissal on this ground a penalty may be imposed just as if upon an affirmance. Deming v. Carlisle Packing Co., 226 U. S. 102, 109. We think that damages of $1,500 for delay are not excessive in this case. We, therefore, direct the dismissal 234 OCTOBER TERM, 1922. Syllabus. 262 U. S. of the appeal with damages of $1,500 and the taxation of costs as upon an affirmance of the decree of the District Court. Dismissed. GRAHAM, INDIVIDUALLY AND AS FORMER COLLECTOR OF INTERNAL REVENUE, ET AL. v. du PONT. CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE THIRD CIRCUIT. No. 846. Argued April 30, 1923.—Decided May 21, 1923. 1. Under § 3224, Rev. Stats., federal taxing officers who, in the course of general jurisdiction over the subject-matter, have made an assessment and claim that it is valid, cannot be enjoined from collecting the tax upon the ground that the assessment is illegal. P. 254. 2. One who would contest the validity of a federal tax upon the ground that the assessment and the right to distrain were barred by a statutory time limitation, should pay the tax and sue to recover it, and not seek relief by a suit to enjoin the Collector from distraining for the tax. P. 255. 3. Under § 252 of the Revenue Act of 1918, reenacted in the Revenue Act of 1921, a taxpayer whose return of income was due March 15, 1916, and against whom an additional assessment was made December 31, 1919, could pay the amount of the assessment, make his claim therefor, and, if that were rejected, have at least until March 15, 1921, within which to sue to recover back the payment. P. 256. 4. A taxpayer cannot, by delaying payment of an assessment until his right to sue to recover it back is barred by limitations, make a case so extraordinary and entirely exceptional as to render Rev. Stats., § 3224, inapplicable to his suit to enjoin collection by distraint. P. 256. Lipke v. Lederer, 259 U. S. 557; Hill v. Wallace, id. 44, and other cases distinguished. 5. A taxpayer, whose income return for the year 1915 was filed before March 15, 1916, and who was assessed additionally, December 31, 1919, and, on March 8, 1920, filed a claim for abatement GRAHAM v. du PONT. 235 234 Statement of the Case. of such assessment as void, because not made within the statutory-time limit therefor and because made on a dividend of corporate shares which were not income (involving a question afterwards determined adversely in United States v. Phellis, 257 U. S. 156,) held, entitled under § 252 of Revenue Act 1921, and § 3226, Rev. Stats., as amended by Revenue Act of March 4, 1923, c. 276, 42 Stat. 1504, to pay the tax assessed, bring suit to recover it back, and, in such suit to raise questions as to the value of the stock, and the amount of resulting tax, and also as to whether the assessment was barred by statutory time limitation. P. 258. 284 Fed. 1017, reversed. This is a proceeding by certiorari to review the action of the Circuit Court of Appeals of the Third Circuit in affirming on appeal a temporary injunction granted by the District Court of Delaware restraining the then Collector of Internal Revenue for the District of Delaware from levying a distraint against the property of the complainant, Alfred I. duPont, to collect the sum of $1,576,015.86 assessed against him by the Commissioner of Internal Revenue. In a reorganization of a Dupont Powder Company of New Jersey and the organization of a new Dupont Powder Company of Delaware to take over many of the assets of the old company, the complainant in the year 1915 received 75,534 shares of the common stock of the Delaware Company of the par value of $100 each. The transaction was the subject of consideration by this Court in United States v. Phellis, 257 U. S. 156, where it was determined that shares in the Delaware Company received by stockholders of the New Jersey Company, as the complainant received his, at the rate of two in the Delaware Company in exchange for one in the New Jersey Company, was a separation of past accumulation of profits from the capital of the New Jersey Company and a distribution to the stockholders, and thus constituted taxable income under the Income Tax Law of 1913. The complainant filed a return and an amended return 236 OCTOBER TERM, 1922. Statement of the Case. 262 U. S. in March, 1916, of his income for the year 1915, in which he did not include these shares. In November, 1917, the Department began an investigation into the liability of the complainant to pay an income tax on his shares of stock in the Delaware Company and finally ordered an assessment of $1,576,015.86. The complainant was notified of this assessment made December 31, 1919. He replied the next day that as his return for 1915 was filed before March 15, 1916, and as the law required any assessment for additional amount to be made within three years, and that period had expired, the assessment and demand for payment were illegal. On February 2, 1920, a hearing was granted to counsel for complainant by the Commissioner of Internal Revenue. On March 8, 1920, complainant filed a claim for the abatement of the assessment of $1,576,051.86 as void because made after the limitation of three years had expired and because the tax was on something that was not income under the law. Thereafter by agreement between the stockholders similarly situated, one stockholder, Phellis, paid the tax due under a similar assessment and brought suit in the Court of Claims to recover it. Counsel for the complainant herein took part in the argument of that case. The Court of Claims gave judgment against the United States, but on appeal the judgment was reversed. The opinion of the Court was handed down November 21, 1921. All claims for abatement had been held and not decided by the Commissioner under an agreement with the counsel in the Phellis Case. Thereafter the Commissioner rejected complainant’s claim for abatement. The bill of complaint was filed January 30, 1922. The District Court granted the temporary injunction. The Circuit Court of Appeals on appeal affirmed the temporary injunction for the reasons stated in the opinion of the District Court. GRAHAM v. du PONT. 237 234 Argument for Petitioners. Mr. Solicitor General Beck, with whom Mr. Nelson T. Hartson and Mr. Chester A. Gwinn were on the briefs, for petitioners. The suit in this case has for its purpose the restraining of the collection of a federal tax, and it cannot be maintained. The only relief prayed for in the bill was injunction to restrain the collection of the tax. It is true that there was a general prayer for relief, but any relief given under a general prayer must be agreeable to the case made by the bill. Allen v. Pullman’s Palace Car Co., 139 U. S. 638, 662. In this instance respondent sought a preventive remedy only. If § 3224 had never been enacted, it is possible that the collection of a federal tax might be restrained in cases where the remedy at law is doubtful, although from an examination of the cases arising prior to its enactment, it appears that the United States courts were unanimous in holding that the collection of a federal tax could not be restrained by injunction, regardless of the absence of any express legislative enactment inhibiting such relief. Ro-back v. Taylor, 4 Int. Rev. Rec. 170; McGee v. Denton, 5 Blatchf. 130; United States v. Pacific R. R., 4 Dill. 66. Since the enactment of § 3224 (originally § 10, Act of March 2, 1867, c. 169, 14 Stat. 475), the District and Circuit Courts have had occasion to construe and apply it in many cases, and it may be said without fear of successful contradiction that there can not be found in the federal reports to-day a single decision standing unreversed or unmodified where injunction has been granted to restrain the collection of a federal tax. On the other hand, the cases are practically unanimous in holding that the inhibition of § 3224 applies to all assessments of taxes made under color of their offices by internal revenue officers charged with general jurisdiction 238 OCTOBER TERM, 1922. Argument for Petitioners. 262 U. S. of the subject of assessing taxes. Snyder v. Marks, 109 U. S. 189, 193; Pacific Whaling Co. v. United States, 187 U. S. 447; Corbus v. Alaska Gold Mining Co., 187 U. S. 455; Dodge n. Osborn, 240 U. S. 118; Dodge v. Brady, 240 U. S. 122; Bailey v. George, 259 U. S. 16. This Court will not confuse the case at bar with the recent cases of Lipke v. Lederer, 259 U. S. 557, and Regal Drug Corporation v. Wardell, 260 U. S. 386, in which the collection of penalties under § 35 of the National Prohibition Act was restrained, or with Pollock v. Farmers’ Loan & Trust Co., 157 U. S. 429, and Brushaber v. Union Pacific R. R. Co., 240 U. S. 1, which were suits by stockholders against the corporation in which they held stock. Nor does Hill v. Wallace, 259 U. S. 44, support this suit, because this Court sustained that case as a stockholders’ suit against a corporation to restrain the payment of so-called “ taxes,” adjudged to be beyond the taxing power under the Constitution, and therefore within the rule laid down in the Pollock and Brushaber Cases. This Court held that the statute laying the taxes in the case of Hill v. Wallace was not a taxing act, but an act to regulate grain exchanges. The exaction was not, therefore, strictly speaking, a “ tax,” nor had there been any assessment by the Commissioner of Internal Revenue or attempt by the collector of internal revenue to collect an assessment. The effect of the decision was not, therefore, to restrain the collection of a tax. The effect of § 3224, Rev. Stats., as construed and applied by this Court, may be summed up as follows: If the assessment is of a tax for revenue purposes, made and attempted to be enforced by the proper revenue officers of the United States under color of their offices, its collection can not be restrained by injunction. Cheatham v. United States, 92 U. S. 85; State Railroad Tax Cases, 92 U. S. 575; Snyder n. Marks, 109 U. S. 189; Pacific Whaling Co. v. United States, 187 U. S. 447; Corbus v. Alaska GRAHAM v. du PONT. 239 234 Argument for Petitioners. Gold Mining Co. 187 U. S. 455; Dodge v. Osborn, 240 U. S. 118; Dodge v. Brady, 240 U. S. 122; Bailey v. George, 259 U. S. 16. Respondent’s remedy at law was plain, adequate, and complete, and was not, and is not, barred by any provision of the Revenue Act of 1921, or any other statute. The District Court was clearly right in denying plaintiff relief on the grounds: (1) That the assessment was illegal and invalid in that it was not made within three years after the due date of the return; Eliot National Bank v. Gill, 210 Fed. 933; Penrose v. Skinner, 278 Fed. 284; Snyder n. Marks, 109 U. S. 189; (2) that the amount of the assessment was larger than it should have been; Phellis v. United States, 56 Ct. Clms. 156; Snyder v. Marks, 109 U. S. 189; Rev. Stats., § 3224; (3) that the assessment constituted a cloud upon respondent’s title to his lands; Rev. Stats., § 3224; Dodge v. Osborn, 240 U. S. 118; (4) that the enforcement of the assessment and demand would result in great hardship to respondent. Calkins v. Smietanka, 240 Fed. 138; Markle v. Kirkendall, 267 Fed. 498. The reason assigned by the District Court, absence of adequate legal remedy, gives no effect whatever to § 3224, but attempts to decide the case on general principles of equity. Furthermore, it is incorrect. Section 252, Revenue Act 1921, did not bar respondent from his remedy at law; and, even if it did, the bar has been removed by the amendment of March 4, 1923. The court below held that the first proviso of § 252 constituted a bar to respondent’s remedy at law because more than five years had elapsed since the due date of the income-tax return, and the tax was still unpaid; therefore, if respondent had paid the tax after such five years, he could not have claimed a refund because, under the first proviso of § 252, the Commissioner of Internal Revenue was not authorized to allow a credit or refund after such five years. 240 OCTOBER TERM, 1922. Argument for Petitioners. 262 U. 8. The construction of the court below was contrary to the contemporaneous construction of the Department at the time the bill was filed, which was later published in T. D. 3416, approved December 16, 1922. But the previous construction is immaterial now, because by the amendment of March 4, 1923, Congress has authorized the Commissioner to allow a refund or credit in any case where the claim is filed within two years after the payment of the tax, even if the payment is more than five years after the due date of the return. Section 250 (d), Revenue Act 1921, does not bar the collection by distraint after, if the assessment is made before, the expiration of five years after the date when the return was filed. Section 1320 of that act, cited in the opinion of the court below, does not apply to income taxes- Distraint is not a “ proceeding ” within the meaning of § 250 (d) to the effect that “ no suit or proceeding for the collection of any such taxes . . . shall be begun, after the expiration of five years after the date when such return was filed.” The “ proceeding ” referred to therein is obviously a judicial proceeding. This Court indicated by its language in Dodge n. Osborn, referring to § 3224, that there might possibly arise a case where “ by some extraordinary and entirely exceptional circumstance its provisions are not applicable.” Such a case had apparently not come to the attention of this Court up to the time of its decision in Dodge v. Osborn, but the kind of case it evidently had in mind was such as Lipke v. Lederer, 259 U. S. 557, where this Court held that the exaction was not a 11 tax,” and that § 3224 did not apply. Such a case might also arise where an unauthorized person attempts without color of office or of law to enforce distraint for the collection of an alleged tax; but it can never apply in a case like the one at bar, where the tax in some amount was indisputably due under a decision of this Court, United States Phellis, 257 • GRAHAM v. du PONT. 241 234 Argument for Respondent. U. S. 156; the amount of the assessment was correct under a decision of the Court of Claims, Phellis v. United States, 56 Ct. Clms. 157; the assessment was made by the Commissioner of Internal Revenue and claimed by him to be correct; and the collection was attempted by a method prescribed by law and by an officer authorized by law to make such collections. Snyder v. Marks, 109 U. S. 189; Kensett v. Stivers, 10 Fed. 517. Mr. William A. Glasgow, Jr., with whom Mr. Henry P. Brown was on the brief, for respondent. The alleged assessment under authority of which the distraint is proposed to be made, is without authority of law, illegal and void. The threatened seizure and sale of respondent’s property will be illegal and invalid, unless the tax claimed has been duly and properly assessed and the threatened proceedings are authorized by statute. Williams v. Peyton, 4 Wheat. 77; Early v. Doe, 16 How. 610; Ronkendorff v. Taylor’s Lessee, 4 Pet. 349 ; 37 Cyc. 1231. Under the Income Tax Act of 1913, § E, 38 Stat. 169, and Rev. Stats., § 3176, as amended by that act, 38 Stat. 179, the assessment was illegal because: (1) The only return alleged by petitioners to have been made upon behalf of respondent, was not made until July, 1919, or thereafter. (2) The alleged return relied upon by the petitioners was not such a return as was contemplated by the act, as it was not made by the persons designated or in the manner prescribed. (3) The assessment was not based upon the alleged return. (4) The assessment was not made until December, 1919. The Commissioner not only failed to comply with the requirements of the law, but was without any jurisdiction whatever to make that assessment at the time that it was made. Under these circumstances the assessment is not merely irregular but void. Ogden City v. Armstrong, 168 U. S. 224. 51826°—23-------16 242 OCTOBER TERM, 1922. Argument for Respondent. 262U.S. It follows that there is no basis for any summary proceedings by distraint to enforce payment of the additional tax claimed by the petitioners. The petitioners’ contention that the three-year period referred to in § E, Act of 1913, relates merely to the time within which the discovery of the omission of income must be made is erroneous; the period relates to the time within which the Commissioner must file a return. Under their construction, if any error was discovered by the Commissioner within three years, he would have had authority at any time thereafter, no matter how remote, to make a return and assessment and proceed to collect the tax by summary process. His authority to proceed by summary proceedings, would not necessarily be determined by any matter of record, but would depend entirely upon whether he or his predecessor in office had knowledge of the error within the three-year period. The burden would be upon the taxpayer to disprove such knowledge and this whether the Commissioner was alive or dead or otherwise unobtainable as a witness. Thus every case wherein a return was filed after the three-year period would necessarily involve the question of fact as to whether the alleged error had been discovered within said period by the Commissioner then in office. Woods v. Llewellyn, 252 Fed. 106; Eliot National Bank v. GUI, 218 Fed. 600; Penrose v. Skinner, 278 Fed. 284; Montgomery’s Income Tax Procedure, ed. 1922, p. 196, footnote 17. The threatened distraint would be in violation of the express inhibition of § 250 (d), Revenue Act 1921. On January 30, 1922, when this proceeding was instituted, more than five years had expired since March 1, 1916, when respondent’s return was filed, and a distraint or seizure of his property at that time would have constituted a 11 proceeding ” within the inhibition of that section. GRAHAM v. du PONT. 243 234 Argument for Respondent. That this is the proper construction of its provisions appears unmistakably from the fact that they forbid a determination and assessment after the five year period “ unless both the Commissioner and taxpayer consent in writing to a later determination, assessment and collection of the tax.” In other words, it was recognized by Congress that consent to merely a determination and assessment of the tax after the five year period would be futile, because even if the tax should be thus determined and assessed, its collection would still be impossible because of the provisions forbidding the commencement of “ any suit or proceeding for the collection ” of the tax after the five year period. In order to make the consent of the taxpayer effective, therefore, it was provided that it should relate not only to the determination and assessment of the tax but to its collection. That the phrase “ proceeding for the collection of any such taxes ” as used in § 250 (d) contemplates a collection by distraint, is also evidenced by other provisions of the Revised Statutes. See §§ 3190, 3187, 3196, 3197, 3207. These designate the proceedings which are available to the Collector for the collection of a tax, and are obviously contemplated by the inhibition of § 250 (d) against any “ proceeding for the collection of any such taxes.” Congress could have had no reasonable object in prohibiting, after the five year period, such a suit as is contemplated by § 3207, while allowing a distraint or seizure after that period under §§ 3187 and 3196. Likewise, if, as petitioners claim, Congress had intended to impose no time limit upon the right of the Government to collect a tax by distraint, provided an assessment had been made within five years from the time the tax was due, it is difficult to understand why, in a case where such an assessment had been made, Congress expressly prohibited the collection of such tax by suit after the expiration of said period. 244 OCTOBER TERM, 1922. Argument for Respondent. 262U.S. The remedy of distraint has always been the customary method employed to collect taxes, and it has been only in very exceptional cases that the Government has ever resorted to suit. What purpose could Congress have had in mind in depriving the Government of an extraordinary remedy rarely used, while leaving unaffected the customary proceeding by distraint? The obvious intention of Congress was to protect the taxpayer. But what possible reason could there be for protecting him against procedure almost never employed by the Government, if no protection was to be afforded him against the usual and ordinary method of proceeding by distraint? Also, under the theory advanced by the petitioners, the words “ or proceedings ” would have comprehended only that which would be included in the ordinary definition of the word “ suit,” and would, therefore, have been mere surplusage. The provisions of § 250 (d) which require determination and assessment of the tax within the five-year period, obviously relate to the functions of the Commissioner and impose restrictions upon his authority; while it is equally apparent that the provisions which enjoin any suit or proceeding for the collection of the tax after the prescribed period, relate to the functions of the Collector and are intended to impose restrictions upon his authority to collect taxes which have been assessed by the Commissioner, regardless of the method of collection adopted. Moreover, while we contend that the limitation imposed by § 250 (d) applies whether or not there has been an assessment, we also take the position, already explained, that the assessment relied upon by the petitioners is illegal and void and that the situation is the same as though no assessment had been made. If this contention is correct, it is immaterial whether or not distraint is contemplated by the word “ proceeding ”, as neither assessment nor distraint would have been made within the five-year period. GRAHAM v. du PONT. 245 234 Argument for Respondent. We submit, therefore, that the express language and obvious purpose of § 250 (d), was to afford the honest taxpayer, after the expiration of the five-year period, protection against the institution of any proceedings whatever, whether by distraint or otherwise, which have for their object the collection of a tax, and regardless of whether there had or had not been an assessment. We also submit that the foregoing argument demonstrates the correctness of our first principal proposition, that a distraint by the petitioners for the purpose of collecting the additional income tax claimed to be due from respondent for the year 1915, would be without authority of law and in violation of express statutory inhibition. Section 3224, Rev. Stats., does not preclude the respondent from equitable relief. The “ extraordinary and entirely exceptional circumstances ” referred to in Hill v. Wallace, 259 U. S. 44, consisted of the fact that failure to pay the tax would subject the taxpayer “ to heavy penalties ” and that recovery of the amount paid by the Board of Trade “ would necessitate a multiplicity of suits and, indeed, would be impracticable.” In the present case the “ extraordinary and entirely exceptional circumstances ” making § 3224 inapplicable are as follows: (1) The Commissioner had no jurisdiction to make the assessment relied upon and the assessment was, in consequence, void. (2) Section 3224, when construed in connection with § E of the Act of 1913 and with § 250 (d) of the Act of 1921, does not forbid equitable relief under circumstances such as exist in the present case. (3) Unless the respondent is afforded equitable relief, he will be without legal remedy or such remedy would be inadequate. We have already shown that the Commissioner had no jurisdiction to make the assessment. The following cases show that under such circumstances § 3224 has no appli- 246 OCTOBER TERM, 1922. Argument for Respondent. 262 U. S. cation: Ledbetter v. Bailey, 274 Fed. 375; Polk v. Page, 276 Fed. 128; Page v. Polk, 281 Fed. 74 (reversed on another aspect); Nichols v. Gaston, 281 Fed. 67; Frayser v. Russell, Fed. Cas. No. 5,067; Ogden City v. Armstrong, 168 U. S. 224. The foregoing cases show that § 3224 is applicable when the injunctive relief prayed for is dependent upon mere errors or irregularities in the assessment which do not go to the foundation of the tax. In such cases it may be properly said that provided the assessment is made under color of their offices by proper government officials charged with general jurisdiction of the subject of assessing taxes, the taxpayer is remitted to his legal remedy if there be one. When, however, it is no mere error or irregularity in the assessment, which is complained of, but upon the contrary a complete want of jurisdiction in the Commissioner to make the assessment and the assessment is in consequence void, § 3224, is not applicable. It may be said of the federal tax system, as it was said in effect, in Ogden City v. Armstrong, supra, in reference to the laws of Utah, that the system prescribed by the United States with respect to the collection and refund of taxes, is intended to apply in all cases where the tax is properly assessed and collected, or where there is a mere irregularity or error in the assessment or collection which does not go to the foundation of the tax. But that, where the assessment and, in consequence, the tax is wholly void and illegal, the statutes and their remedies for errors and irregularities have no application. Section 3224, Rev. Stats., when construed in connection with § E, Revenue Act 1913, and with § 250 (d), Revenue Act 1921, does not forbid equitable relief under circumstances such as exist in the present case. As already shown, § E of the Act of 1913, authorizes assessment, in the case of “ false ” returns, within three years after the return was due, while § 250 (d) of the GRAHAM v. du PONT. 247 234 Argument for Respondent. Revenue Act of 1921, expressly prohibits “ any suit or proceeding for the collection ” of the tax after five years from the date the return was filed. These provisions were enacted for the purpose of protecting the taxpayers against assessment and against any summary proceeding instituted to collect the tax, after the three and five years periods had elapsed. Can the petitioners successfully maintain that it was the intention of Congress that the taxpayer should be without any means of availing himself of this protection in case the government officials chose to disregard the statutory limits imposed upon their authority? Unless the respondent is entitled to equitable relief, he can in no way obtain the protection intended to be afforded him by Congress and the statutory limitations imposed upon the authority of the Commissioner and Collector would be meaningless. Unless the Court may exercise its restraining influence in such a case as the present, there would be, in effect, no limitation upon the period during which an assesment or distraint might be made. Such a result, so manifestly opposed to the intention of Congress, may be avoided by reading § 3224, and the Acts of 1913 and 1921, together and in the light of the authorities already cited. When so construed, § 3224 applies when the complaint is of some mere error or irregularity in the proceeding or an improper exercise of discretion upon the part of a government official, but does not forbid relief when the threatened distraint is not only based upon a void assessment but is also expressly forbidden by statute. Revised Statutes, § 3224, provided that no injunction shall issue to restrain the assessment or collection of any tax, and by a later statute (Act of 1921) it is provided that no suit or proceeding shall be begun for the collection of any taxes after the expiration of five years after the 248 OCTOBER TERM, 1922. Argument for Respondent. 262U.S. date when the return was filed. It would seem obvious that the only way to enforce the provisions of the Act of 1921 would be by injunction if the Collector undertook to violate its provisions, and therefore § 3224 and the Act of 1921, should be read together, and in a case where the limitation bars the officer’s right to proceed, it should be held that the provisions of the Act of 1921 supersede § 3224. Unless the respondent is afforded equitable relief, he will be without legal remedy or such remedy would be inadequate, for the following reasons: (a) The right given to the respondent by § E, Revenue, Act 1913, to be protected against assessment after the expiration of the three-year period, and the right given him by § 250 (d), Revenue Act 1921, to hold his property free from seizure and distraint after five years from the date when his return was filed, cannot be enforced in a court of law. (b) There is no statutory provision under which the respondent may file a claim for refund, which is a condition precedent to the institution of suit. (c) Assuming, for argument’s sake, that a legal remedy would be available to the respondent, it would be inadequate to compensate him for the loss of his freehold. The statutory provisions in question confer upon the taxpayer a substantial right, the right to hold his property free from seizure and distraint after the five year period, and the only way in which the respondent may enforce this right and obtain the protection intended to be afforded him by § 250 (d), is by asserting the provisions of that section as a bar to the collection of the tax. Moreover it would appear that the only right given to the taxpayer by that section, is the right to oppose the collection of the tax after the five year period, and that if this right cannot be successfully asserted as a bar to collection, it becomes ineffective for any purpose whatever. GRAHAM v. du PONT. 249 234 Argument for Respondent. for it is at least extremely doubtful whether such right as is given by § 250 (d) could be made the basis of a suit by a taxpayer to recover the amount of a tax which has been collected. In such a suit the Government would contend that its right to the tax was not impaired by § 250 (d), and that that section relates solely to remedy and gave the taxpayer merely a personal defense which he had been unable to successfully interpose to the collection of the tax. As against the threatened distraint proceedings, the only way in which respondent may interpose the right or defense afforded by § 250 (d) is by a proceeding in equity. A like argument applies to the enforcement of the right given respondent by § E, Revenue Act 1913, to be protected against assessment after the three year limitation. There is no statutory provision under which the respondent may file a claim for refund, which is a condition precedent to the institution of suit. Section 3226, Rev. Stats., as amended by Revenue Act 1921, provides that no suit or proceeding shall be maintained for the recovery of any tax,11 until a claim for refund or credit has been duly filed with the Commissioner of Internal Revenue, according to the provisions of law in that regard, and the regulations of the Secretary of the Treasury established in pursuance thereof.” Section 3228, as amended by the Act of 1921, is the only statute under which a claim for refund may be filed which will afford a basis for a suit and this section does not apply to a claim for refund of taxes paid under the Revenue Act of 1913. Assuming, for argument’s sake, that a legal remedy would be available to the respondent, it would be inadequate to compensate him for the loss of his freehold. Ogden City v. Armstrong, 168 U. S. 224. We submit, therefore, that the present case falls within the category of extraordinary and exceptional cases which 250 OCTOBER TERM, 1922. Argument for Respondent. 262 U. S. have been held by this Court not to be within the inhibition of § 3224, Rev. Stats. It is submitted that there is not the slightest similarity between the facts in Snyder v. Marks, 109 U. S. 189, and those in the present case. Moreover, in that case, this Court held that § 3224 forbids injunctive relief only when the tax claimed “ is in a condition to be collected as a tax,” and that11 the list shows a tax which the appellant might be liable to pay, and one which the commissioner had general jurisdiction to assess against him,” (109 U. S. at 192, 193), whereas in this case the claim is for a tax which the collector is expressly forbidden to attempt to collect by any “ suit or proceeding.” In discussing the technical legal points of the present case, one is apt to lose sight of the substantive merits of the respective positions of the parties. The facts show that the alleged return is not in proper form, nor made by the proper official; it was not made within three years from March 1, 1916; the alleged assessment relied upon was not even based upon the alleged return, and was likewise made after the three years period, and the tax claimed is based on a valuation of the stock far in excess of its real value. In addition to this, we have the Act of 1921, expressly forbidding the collector from proceeding either by distraint or suit to collect any tax after five years from the date when the return was filed. Regardless of these facts, we have the spectacle of a United States government official insisting that although his threatened actions are in express violation of statutory inhibition, they cannot be enjoined because of a technical construction of § 3224, Rev. Stats. According to his contention, he must, therefore, be permitted to collect the tax by distraint, although Congress has declared that he shall not, and respondent must be left to discover by long and tedious legal process whether or not there is any legal GRAHAM v. du PONT. 251 234 Reply for Petitioners. remedy by which he may obtain any redress for a wrong committed in violation of express statutory inhibition. Mr. Solicitor General Beck in reply: The amount of the tax due to the United States from the respondent cannot be determined in a suit for injunction to restrain the collection of the assessment. The assessment of the tax made by the Commissioner of Internal Revenue in December, 1919, was legal and its collection by distraint was not barred by § 250 (d), Revenue Act 1921, or any other statute. Viewed either in the light of the limitation contained in § II E of the Income Tax Act of October 3, 1913, under which the tax was assessed, or under § 250 (d), Revenue Act of 1918, if applicable, the assessment of the Commissioner was made within the statutory period and was a legal assessment. The assessment was made within five years and was therefore within the limitation prescribed by the later act. Whether the Act of 1918 applied only to taxes imposed thereunder may be an open question. The return was due and was made March 1, 1916, and the assessment was made on the December, 1919, list. The assessment in this case was made under the Income Tax Act of 1913, § II E. By the word 11 false,” contained in § II E, is not meant “ fraudulent,” but merely untrue or incorrect. Woods v. Llewellyn, 252 Fed. 106; Eliot National Bank v. Gill, 210 Fed. 933; 218 Fed. 600; National Bank v. Allen, 223 Fed. 472; United States n. Nashville & St. Louis Ry. Co., 249 Fed. 678. In any event the failure of the respondent to make a return of the income in question was a11 refusal or neglect.” Fraud is not essential. Respondent’s return for the year 1915 was untrue and incorrect in the light of the decision of this Court in the Phellis Case. Under § IIE of the 1913 Act, if the discovery of the falsity of the return was made within three years the assess- 252 OCTOBER TERM, 1922. Reply for Petitioners. 262 U. S. ment could be made at any time thereafter. Eliot National Bank n. Gill, 218 Fed. 600; Penrose v. Skinner, 278 Fed. 284. This agrees with the departmental construction of the Act of August 5, 1909, and the Act of October 3, 1913, and such has been the continuous and uniform construction of the Department ever since the enactment of said statutes. Respondent raises other questions, such, for example, as that § IIE of the Income Tax Act of 1913, requires a “ return on information ” to be made by the Commissioner, and that the return in this case was not (a) in the prescribed form, (5) made by the Commissioner himself or the collector or deputy collector, but was made by a revenue agent, (c) made within three years after the due date of the return, and (d) did not show the exact amount of tax as was shown by the assessment. These objections to the form and manner of making the assessment are not entitled to consideration in this form of proceeding. At the most, they affect merely the regularity of the assessment. Nothing could be better settled by the decisions of this Court than that neither the accuracy nor the validity of an assessment of a tax can be determined in a suit for injunction to restrain its collection. Snyder n. Marks, 109 U. S. 189; Dodge v. Osborn, 240 U. S. 118; Pacific Whaling Co. v. United States, 187 U. S. 447. Distraint for the collection of the assessment would not violate § 250 (d), Revenue Act 1921, and even if it did, the remedy would not be by injunction to restrain the collection of the tax. The respondent misconstrues § 250 (d). It does not contain a five-year limitation upon the collection by distraint of taxes due and assessed under the Act of 1913. A limitation upon two separate acts is contemplated by it: (1) upon assessment, and (2) upon a “suit or proceeding.” The limitation upon judicial remedy is conditioned GRAHAM v. du PONT. 253 234 Reply for Petitioners. upon and a part of the preceding limitation as to assessments. Congress obviously meant that the Government could have the prescribed period of years to assess the tax, and recognizing the preexisting law that it could sue to enforce a tax liability even though there were no assessment, it further provided, in order to make its limitation effective, that when the Government had not assessed the tax within the prescribed period it could not sue in the courts, either at common law or in equity, to enforce the unassessed liability of the taxpayer. If, however, the taxes were assessed within the prescribed period, then the limitation as to a “ suit or proceeding ” had no application and a suit could be begun at any time. This construction is in harmony with the entire scheme of taxation, for a tax when assessed has always been a definite liability, and remains a perpetual lien upon the taxpayer’s real estate and it was never intended that when a tax was once assessed the taxpayer could escape by a limitation of time. To do this would he to put a premium upon the neglect to pay taxes duly assessed. An assessment becomes a lien on all the property of the taxpayer under § 3186, and requires no judgment of a court for its satisfaction. An assessment is unnecessary as the basis of a suit to recover taxes, and a suit is unnecessary where there is a valid assessment. To hold that the right to distrain is limited to five years after the due date of the tax, as is the right to assess, would be to destroy the force and effect of an assessment, if made near the end of the five-year period. See Report, Committee on Finance, No. 275, 67th Cong., 1st sess., p. 21, part IV. The word “ proceeding ” has been used over and over again by Congress in conjunction with the word “ suit ” to refer to judicial proceedings and to judicial proceedings alone. 254 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. Conceding for the sake of argument that the construction of § 250 (d) is doubtful; even so, the rule in cases of doubtful construction is not that “ the doubt is to be resolved in favor of the taxpayer,” as stated in respondent’s brief, with a quotation from 22 Cyc. 1605. It is only where there is doubt as to whether the statute levies a tax upon a particular person or thing that the doubt has been resolved in favor of the taxpayer by this Court. Gould v. Gould, 245 U. S. 151. There is no question in this case that the respondent is a taxable person or that the dividends received by him were taxable as income. United States v. Phellis, 257 U. S. 156. He is seeking exemption from taxation through a technicality, and such exemptions áre to be strictly construed against the person claiming the exemption. Bank of Commerce v. Tennessee, 161 U. S. 134, 146. Respondent can pay the tax and file a claim for the refunding thereof under § 252, Revenue Act of 1921, as amended by the Act of March 4, 1923. Under § 252, as amended, respondent can file a claim for refund or credit within two years after payment of the tax, and if his claim is rejected or held by the Commissioner for six months without a decision, he can commence a suit for the recovery back of the tax under § 3226, Rev. Stats., as amended by § 1318, Revenue Act 1921, and the Act of March 4, 1923. See also T. D. 3462, amending Art. 1039, Regulations 62, Income Tax, 1922 ed.; T. D. 3463, amending Art. 1050, Regulations 63; and T. D. 3457, dated March 17, 1923. Mr. Chief Justice Taft, after stating the case as above, delivered the opinion of the Court. Section 3224, Rev. Stats., provides that “No suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court.” In Cheatham v. United States, 92 U. S. 85, 88; State Railroad Tax Cases, GRAHAM v. du PONT. 255 234 Opinion of the Court. 92 U. S. 575, 613, and in Snyder n. Marks, 109 U. S. 189, 193, it was said that the system prescribed by the United States in regard to both customs duties and internal revenue taxes, of stringent measures not judicial, to collect them, with appeals to specified tribunals and suits to recover back moneys illegally exacted, was a system of corrective justice intended to be complete, and enacted under the right belonging to the government to prescribe the conditions on which it would subject itself to the judgment of the courts in the collection of its revenues. In the exercise of that right, it declares by § 3224 that its officers shall not be enjoined from collecting a tax claimed to have been unjustly assessed, when those officers, in the course of general jurisdiction over the subject matter in question, have made the assessment and claim that it is valid. This view has been approved in Shelton v. Platt, 139 U. S. 591; in Pittsburgh, etc., Ry. v. Board of Public Works, 172 U. S. 32; in Pacific Steam Whaling Co. v. United States, 187 U. S. 447, 451, 452; in Dodge v. Osborn, 240 U. S. 118, 121, and in Bailey v. George, 259 U. S. 16. The District Court recognized the sweep of these decisions in respect of the contention of the complainant that the assessment of this tax and the threatened distraint to collect it were barred by limitations under the statute, and was of opinion that as a rule such attacks upon the validity of the tax could only be heard and considered after the tax had been paid in a suit to recover it back. In this view we fully concur. The District Court, however, thought that an exception to the operation of § 3224 must arise when it appeared, as it held it did appear here, that no provision of law existed by which if the taxpayer when he filed his bill for an injunction had paid the tax assessed, he could bring a suit to recover it back because it would be barred by the statutory limitation of time in which such a suit could be brought. 256 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. The court based its conclusion on § 252 of the Revenue Act of 1918, c. 18,40 Stat. 1085, reenacted in the Revenue Act of 1921, c. 136, 42 Stat. 268, which reads as follows: “ If, upon examination of any return of income made pursuant to . . . the Act of October 3, 1913 . . . it appears that an amount of income . . . tax has been paid in excess of that properly due, then, notwithstanding the provisions of section 3228 of the Revised Statutes, the amount of the excess shall be credited against any income . . . taxes, or installment thereof, then due from the taxpayer under any other return, and any balance .of such excess shall be immediately refunded to the taxpayer: Provided, That no such credit or refund shall be allowed or made after five years from the date when the return was due, unless before the expiration of such five years a claim therefor is filed by .the taxpayer.” The return was due March 15, 1916. The assessment was made December 31, 1919. The complainant might then have paid the tax and would have had two years in which to make his claim, and if rejected, to sue to recover it back if, as he now submits, § 252 limited his right to pay and sue to recover. Under such a construction and application of § 252, suit must have been brought on or before March 15, 1921. This is what Phellis did (United States v. Phellis, 257 U. S. 156) and there was no question raised as to his right to bring the suit in the Court of Claims to recover back the tax paid by him if it had proved to be illegally assessed and collected. Certainly complainant could not, by delaying his payment until his right to sue to recover it back expired, make a case so extraordinary and entirely exceptional as to render § 3224, Rev. Stats., inapplicable. If it be said that he was waiting for the Commissioner to act on his claim for abatement of the assessment, it is enough to say that the Commissioner’s delay until after the decision of the Phellis Case in November, 1921, was GRAHAM v. du PONT. 257 234 Opinion of the Court. due to agreement by the parties. Nor was he prevented from paying the assessment by his claim for abatement. The cases complainant’s counsel rely on do not apply. The cases of Lipke v. Lederer, 259 U. S. 557, and Regal Drug Corporation v. Wardell, 260 U. S. 386, were not cases of enjoining taxes at all. They were illegal penalties in the nature of punishment for a criminal offense. Pollock v. Farmer’s Loan & Trust Co., 157 U. S. 429, and Brushaber v. Union Pacific R. R. Co., 240 U. S. 1, were suits by stockholders against corporations to restrain the corporations from paying taxes alleged to be unconstitutional. Hill v. Wallace, 259 U. S. 44, was in part a suit like the foregoing. It was a bill filed by members of the Chicago Board of Trade to prevent the governing board from applying to the Secretary of Agriculture to have the Board of Trade designated as a “ contract market ” under the Future Trading Act on the ground that the act was unconstitutional and its operation would impair the value of the Board to its members. Without such designation, no member could have sold grain for future delivery without paying a prohibitive tax, and if he sold without paying the tax, he was subjected to heavy criminal penalties. To pay such a tax on each of the many thousands of transactions on the Board, and to sue to recover them back would have been utterly impracticable. It woujd have blocked the entire future grain business of the country and would have seriously injured not only the members of the Board but also the producing and consuming public. This phase of the situation was so clear that the Government in effect consented to the temporary'injunction. See Hill v. Wallace, 257 U. S. 310, s. c. 615. Under these extraordinary and most exceptional circumstances, it was held that § 3224 was not applicable to prevent an injunction against collection of such a prohibitive tax imposed for the purpose of regulating the future grain 51826°—23-----17 258 OCTOBER TERM, 1922. Syllabus. 262 U. S. business with all the unnecessary and disastrous consequences its enforcement would entail if the act was unconstitutional. HUI v. Wallace should, in fact, be classed with Lipke v. Lederer, supra, as a penalty in the form of a tax. Certainly we have no such case here. This conclusion renders it unnecessary for us to consider whether § 252 of the Revenue Act of 1921, in connection with § 3226, Rev. Stats., as amended by the same Revenue Act of 1921, barred complainant’s right to pay the tax and sue to recover it back at the time of filing his bill, as held by the District Court. It is certain that by the amendments to § 252 and § 3226, Rev. Stats., by the Act of March 4, 1923, c. 276, 42 Stat. 1504, the complainant is given the right now to pay the tax, and sue to recover it back, and in such a suit to raise the questions as to the value of the stock and the amount of the resulting tax and also as to the bar of time against the assessment which he attempted to raise in the bill. The decree of the Circuit Court of Appeals is reversed and the case is remanded to the District Court with directions to dissolve the temporary injunction and to dismiss the bill. Reversed. DHARANDAS TULSIDAS ET AL. v. INSULAR COLLECTOR OF CUSTOMS. CERTIORARI TO THE SUPREME COURT OF THE PHILIPPINE ISLANDS. No.'77. Submitted May 2, 1923.—Decided May 21, 1923. 1. A decision of the duly constituted immigration authorities holding an applicant not of a status entitling him to admission, should not be rejected in habeas corpus unless resulting from manifest abuse of power and discretion. P. 263. 2. The right of an alien applicant to be admitted, under the Immigration Act of 1917, as a merchant, does not depend on his,pre- TULSIDAS v. INSULAR COLLECTOR. 259 258 Opinion of the Court. senting a certificate of his status, issued under § 6 of . the Act of May 6, 1882, c. 126, 22 Stat. 58, 60, as amended by § 6 of the Act of July 5, 1884, c. 220, 23 Stat. 115, 116. P. 263. 3. To be admissible as a merchant, under the Immigration Act of 1917, an alien must be actually a merchant,—an owner of a business,—not merely a salesman, manager or other employee; and his status as merchant must exist at the time of his application for admission. P. 264. Affirmed. Certiorari to a judgment of the Supreme Court of the Philippine Islands, which discharged a writ of habeas corpus sued out by the petitioners in a court of first instance, to test the legality of their detention, by the respondent, as inadmissible aliens. Mr. Adam C. Carson, Mr. Hartford Beaumont and Mr. W. Davis Conrad for petitioners. Mr. Grant T. Trent, Mr. Logan N. Rock and Mr. F. G. Munson for respondent. Mr. Justice McKenna delivered the opinion of the Court. Petition in habeas corpus in which petitioners pray to be delivered from the custody of the Insular Collector of Customs, by whom they aver that they are detained for deportation from Manila, at which place they are entitled to land and remain under the Immigration Act of February 5, 1917, c. 29, 39 Stat. 874, being merchants.1 1 “ That the following classes of aliens shall be excluded from admission into the United States: ”... unless otherwise provided for by existing treaties, persons who are natives of islands not possessed by the United States adjacent to the Continent of Asia, . . . or who are natives of any country, province, or dependency situate on the Continent of Asia . . . , and no alien now in any way excluded from, or prevented from entering, the United States shall be admitted to the United States. The provisions next foregoing, however, shall not apply to persons of the following status or 260 OCTOBER TERM, 1922. Opinion of the Court. 262U.S. Petitioners arrived at Manila, September 26, 1919, and were taken before a Board of Special Inquiry formed by the Insular Collector of Customs, constituted of three officers of the Bureau of Customs, duly designated and qualified to serve on such Board at the port of Manila in accordance with law, to determine whether petitioners should be allowed to land, or should be deported. The right of petitioners to land was considered by the Board separately and decided separately, but for convenience we have considered their applications and the proceedings thereon as joint, and, therefore, it is only necessary, in representation of the applications and the proceedings, to say that the Board after consideration of the applications and the testimony given in support thereof, decided as to Tulsidas that it appeared that he had no business in India, and none in the Philippines, that his passport showed that he was only a salesman, and that it was clear that he was “ not a merchant within the meaning of the Immigration Law, and, therefore, not an exempt and entitled to landing.” He was refused landing. The Board also refused landing to Lekhraj and Sukh-rani, deciding that they were salesmen, not industrial partners as they claimed to be, of Wassiamall Assomall & Co., but salesmen in that store. The Board further decided that they had no business of their own and that industrial partners were not merchants within the meaning of the Immigration Law. From the decisions of the Board, petitioners prosecuted appeals to the Insular Collector of Customs and it appearing to him, as he said, that the decisions of the occupations: . . . merchants, . . . , but such persons . . . who fail to maintain in the United States a status or occupation placing them within the excepted classes shall be deemed to be in the United States contrary to law, and shall be subject to deportation as provided in section nineteen of this Act.” [§ 3.] TULSIDAS v. INSULAR COLLECTOR. 261 258 Opinion of the Court. Board were “ reasonable and proper ” in that petitioners being natives of India, failed to show that they belonged to any exempted classes under the provisions of § 3 of the Immigration Act of February 5, 1917, he refused them landing, and ordered that they be 11 returned to their port of embarkation in accordance with law.” It will be observed, therefore, that the officers on whom was imposed the duty of administering the Immigration Law and passing upon the right of an alien applicant to admission into the United States, decided that the petitioners were of the class excluded from admission, and refused them landing. In question of the legality of that ruling, proceedings were instituted in the Court of First Instance by a petition for habeas corpus. To the petition, the Attorney General of the Islands, as representative of the Insular Collector of Customs, and in his official capacity, opposed the decision rendered by the Board of Special Inquiry and the Insular Collector of Customs, and denied the allegations of the petition “ except as same may be admitted in, or appear to be true from, the proceedings of the immigration officials in this case.” The Court of First Instance reversed the rulings of the immigration officials and “ definitely ordered that the petitioners be placed at liberty.” The court assigned especial probative force to the partnership agreement introduced in the case, “ the genuineness of which ” the court said was not questioned, according to which the court further said, “ the petitioners were admitted as industrial partners of said partnership, the first having a right to fifteen per cent of the profits, the second ten per cent, and the third five per cent.” And the court was of the view that “ industrial partners ” were as much merchants as “ capitalist partners.” The Supreme Court of the Philippine Islands to which the case was appealed, revoked the granting of the writ 262 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. of habeas corpus, and ordered and decreed that the judgment of the Department of Customs ordering deportation of petitioners be affirmed. The court based its decision on two grounds: (1) Granting that appellees (petitioners) are merchants, they did not present as proof of the fact the certificate issued under § 6 of the Act of Congress of May 6, 1882, c. 126, 22 Stat. 58, 60, as amended by § 6 of the Act of July 5, 1884, c. 220, 23 Stat. 115, 116, which, it is provided, shall be the sole evidence permissible to establish the exemption of an alien from the prohibition of the Immigration Law. (2) The court considered that, independently of the requirement, appellees (petitioners) had failed to show that they were merchants in the country from which they had come, and that was necessary because the law did 11 not contemplate that aliens who claim to belong to an exempted class, or aliens otherwise prohibited from entering the United States, shall be permitted to enter the territory of the United States to become merchants.” And the court construed the partnership agreement as creating a condition or status after landing in Manila,1 and concluded that, “ There is absolutely nothing in the record which shows that the depart- 1 The partnership agreement recites that it is made the “ nineteenth day of September” 1919, between certain parties who are named “ to be known as the capitalist partners, parties of the first part ” and the petitioners and other parties, “ to be known as industrial partners, parties of the second part, “Witnesseth: That said parties have agreed, and by these presents do agree, to associate themselves as co-partners for the purpose of carrying on the business of buying and selling goods, wares, merchandise and commodities and such commission business as may appertain to the same, in the Philippine Islands to the faithful performance of which they mutually bind and engage themselves each to the other, his executors and administrators: “ 1. That the principal place of business and domicile of this copartnership shall be Manila; or at such other place as the business TULSIDAS v. INSULAR COLLECTOR. 263 258 Opinion of the Court ment of customs abused its power, authority or discretion in the slightest degree.” The conclusion has pertinent signification, for counsel admit that “ under the express provisions of the statute, the decision of a Board of Special Inquiry, such as that now under consideration, is final, when affirmed on administrative appeal”, and only to be reviewed upon habeas corpus when the administrative officers have manifestly abused the power and discretion conferred upon them. It would seem, therefore, as if something more is necessary to justify review than the basis of a dispute. The law is in administration of a policy which, while it confers a privilege, is concerned to preserve it from abuse and, therefore, has appointed officers to determine the conditions of it, and speedily determine them, and on practical considerations, not to subject them to litigious controversies, and disputable, if not finical, distinctions. Keeping in mind the admonition of this, we pass to the consideration of the rulings of the officials and the courts. In the ruling of the Supreme Court that a “ Section-Six certificate,” as the court and counsel call it, is the prescribed evidence for admission under the Immigration Law, we do not concur, but in the ruling of the court that an applicant for admission as a merchant must be such at the time of his application, we do concur. now conducted at said location may hereinafter be transferred by mutual consent, and this contract shall relate to this particular store and business only. “2. That the business of this co-partnership shall be conducted under the firm name of ‘ Wassiamall Assomall & Co.’ “3. That the direction, control and management of this partnership is vested solely and exclusively in the parties of the first part, who are hereby granted full power and authority to appoint such manager or managers from the industrial partners as they may deem necessary or proper for the management of the store above mentioned.” 264 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. The law defines the classes of aliens which shall be excluded from admission to the United States, but provides that the exclusion shall not apply to persons having the “ status or occupations ” of “ merchants.” This means, necessarily, having the “ status ” at the time admission is sought, not a status to come, or to be established. If the latter, what indulgence of time is to be given for its attainment, and how is detriment to the policy of the law while the status is attaining to be prevented, and how terminate the indulgence and the detriment, and execute the law? There can be no answer to those questions consistent with the denial that the status of merchant must exist at the time of application for admission. The petitioners testified, and upon considering the testimony, we encounter some anomalies—anomalies that strain belief in its truth—certainly repel from acceptance, pretensions which are based upon the confusion of established distinctions between occupations. We have seen, the assertion is that petitioners are industrial partners, and as such Lekhraj testified he was absent from Manila over three years but was an industrial partner in the store of* Wassiamall Assomall & Co., during that time—he “ only took a rest.” Sukhrani put his absence at sixteen months. At the time of his testimony, he said he was “ a salesman ” but was to become manager. May we not wonder, in some disbelief, how a salesman or manager, whether his compensation be a salary or a percentage of profits, could have been indulged in absences of such duration? The confounding of occupations—that of salesman or manager with that of merchant—cannot be accepted. A merchant is the owner of the business; a salesman or manager, a servant of it; and especially so under the Immigration Law. The policy of the law must be kept in mind. It is careful to distinguish between the status of a mer- TULSIDAS v. INSULAR COLLECTOR. 265 258 Opinion of the Court. chant and those below that status. A merchant is fixed in it and made constant to it by his financial interest, a salesman or manager is but an employee, however else he may be denominated, and may withdraw from his employment at any moment of time and become a competitor in the ranks of labor, using the word in the sense the law implies. So particular is the law in regard to its distinctions and policy that if a merchant descends from his status he shall be 11 deemed to be in the United States contrary to law, and shall be subject to deportation.” And induced, no doubt, by such consideration as well as the distinction in occupations, the Insular officials adjudged that petitioners were not merchants, so adjudged from their knowledge of the conditions obtaining in the Philippines, so adjudged from contact with petitioners, and in estimate of their pretensions. And, necessarily, we should not view the spoken word, nor even the partnership agreement produced in support of the spoken word, separate from that contact and that estimate. And in accepting the adjudication, we do not share the alarm of counsel that it will result in admitting only petty tradesmen, in excluding “ the managing partners and directors of great mercantile enterprises. We think rather it will leave the administration of the law where the law intends it should be left ; to the attention of officers made alert to attempts at evasion of it and instructed by experience of the fabrications which will be made to accomplish evasion. Counsel themselves seem conscious of the exaggeration which made managers and industrial partners of petitioners in a great enterprise, made especially such of a boy nineteen years of age. As to him (Tulsidas), counsel say, though asserting his right to admission, that “ there is substantial ground for a contention ” that “ the writ [habeas corpus] should not issue because of the lack of sufficient affirmative evidence in the record in support 266 OCTOBER TERM, 1922. Syllabus. 262 U. S. of his claim that he is a merchant, and as such entitled to admission to American territory.” And further, “ as a newcomer to the islands, something more than his own uncorroborated statements as to his status in the country from which he came might fairly and reasonably have been required of him.” We concur with counsel as to Tulsidas and extend the requirement to the other petitioners and hold that instead, as counsel urge, of the Insular officers being obliged to seek confirmation or denial of petitioners’ testimony, they, the petitioners, should have produced something more than their own statements of their status as merchants. It was for them to establish their exemption from the prohibition of the law, for them to satisfy the Insular officials charged with the administration of the law. If they left their exemption in doubt and dispute, they cannot complain of a decision against it. Judgment affirmed. STEVENS v. ARNOLD ET AL., EXECUTORS AND TRUSTEES OF NIRDLINGER. CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE THIRD CIRCUIT. No. 200. Argued May 2, 1923.—Decided May 21, 1923. 1. A suit under 4 N. J. Comp. Stat. p. 5399, to determine title to land, must be dismissed, according to the interpretation of the highest New Jersey court, if the plaintiff fail to show title in himself, even though the defendant set up an independent title, and although the statute provides for a decree conclusively settling the rights of all the parties. P. 268. 2. Dismissal of the bill, in such case, estops the plaintiff from asserting against the same defendant, in a second suit, any ground of title existing at the time of the first suit, especially one that was then waived. P. 268. 3. Such dismissal does not establish the title set up by the defendant; but he may reassert it, by counterclaim, in a second suit STEVENS v. ARNOLD. 267 266 Opinion of the Court. brought by the plaintiff, and, in so doing, does not waive the benefit of the former decree as an adjudication against the plaintiff’s title. P. 269. 4. In New Jersey, a grant by the State of land flowed by the tide revokes the license to riparian owners to wharf out or otherwise encroach upon the tract granted, but it does not prevent them from gaining title by accretion, even though the grant be described by metes and bounds. P. 269. 5. Lands formed by accretions of the sea upon a convex shore, held bounded, not by lines spreading fan-wise from riparian boundaries but by a city street extending through the accreted tract as shown on a plan adopted before the accretions took place. P. 270. 273 Fed. 1022, reversed. Certiorari to a decree of the Circuit Court of Appeals affirming a decree of the District Court against the present petitioner, in a suit brought by respondents’ decedent to quiet title to a parcel of land. Mr. Harvey F. Carr for petitioner. Mr. Robert H. McCarter, with whom Mr. George A. Bourgeois and Mr. Harry R. Coulomb were on the brief, for respondents. Mr. Justice Holmes delivered the opinion of the Court. This is a bill to quiet title to land in Atlantic City, New Jersey, brought primarily at least under a statute of that State. 4 Compiled Stat. p. 5399. (P. L. 1870, p. 20.) The suit was begun by Samuel F. Nirdlinger and now is maintained by his executors and trustees (the respondents). He owned a parcel lying to the East of New Hampshire Avenue, which runs north and south, and to the north of Oriental Avenue which crosses the other avenue at right angles. The defendant owns an adjoining parcel on the other side of New Hampshire Avenue and the land in controversy is a triangular tract having its apex in the southwestern corner of the complainants’ lot 268 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. and spreading South of Oriental Avenue and East of New Hampshire Avenue to the sea. It has been formed by accretion in recent years. The defendant claims title by a former adjudication and by a riparian grant from the State. The District Court entered a decree for Nirdlinger after an elaborate discussion, 262 Fed. 591, and its opinion was adopted and the decree affirmed by the Circuit Court of Appeals. 273 Fed. 1022. The former adjudication relied upon by the defendant was in a suit in the State Court brought against him under the same statute for the same purpose as the present one, by Nirdlinger and the Dewey Land Company from which Nirdlinger afterwards purchased a part of his land. The statute allows a person in peaceable possession of lands, claiming to own the same, whose title is disputed, to bring a suit in chancery against any person claiming an interest, calling upon him to set forth his title. After the issues are tried the decree is to settle the rights of all parties and to be conclusive. The complainants in the chancery suit alleged possession and claimed ownership, at first by accretion but by amendment by virtue of two deeds only. The defendant, as here, set up his riparian grant and a claim by accretion. The Chancellor held that the grant from the State could not be impeached collaterally and dismissed the bill. The Court of Errors and Appeals held this to be error but affirmed the decree on the ground that the complainants showed no title; that the deeds did not give the right claimed and that “ all claim by accretion is waived.” Dewey Land Co. n. Stevens, 83 N. J. Eq. 314, 316; ibid. 656. It would have been intelligible if the Court had held that the complainants’ statement of title was immaterial and that it was enough that they showed possession and a claim of ownership. But it being established that, notwithstanding the claim, if the title disclosed is defective the bill must be dismissed, we think that until the STEVENS v. ARNOLD. 269 266 Opinion of the Court. Court of Errors and Appeals decides otherwise it must be assumed that the decree is conclusive between the parties that at that time the complainants did not own the land. We cannot imagine that the statute contemplated a series of suits based on coexisting titles produced one after another, and especially when the one now relied upon was waived in the earlier case. We assume that the usual rule applies, and that if the claim to own must be justified, all justifications then existing are in issue. It follows that the plaintiffs’ bill must be dismissed. But plainly the claim of the defendant was not established in the former suit. That appears from the nature of the decree, from the opinion of the Court of Errors and Appeals, and from the admitted fact that it subsequently refused to amend its remittitur so as to establish the defendant’s right. See also Dewey Land Co. v. Stevens, 85 N. J. Eq. 374. Therefore the defendant took a proper step and did not waive the benefit of the former decree when in the present case he made a counterclaim and asked that his rights be adjudicated to be paramount. Upon this matter the discussion of the District Court was adequate and convincing, so that the unsatisfactory result will be that neither party can get a declaration of title and the complainants will be left to stand upon their possession alone. The first ground of the defendant’s claim is a grant from the State to the defendant’s predecessors in title of land flowed by tidewater at the date of the deed, June 28, 1900, which included the strip in controversy. There seems to be no doubt from the decision of the Court of Errors and Appeals that this grant put an end to the right of the complainants to build wharves or otherwise to encroach upon the granted land, that being regarded as merely a license, revoked by the grant. The defendant contends that the effect was greater still, and relies upon a statement in the decision referred to, that 270 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. “ if the land was formerly fast land, [as this was said to have been] and the title was lost by erosion, it became the property of the State, not merely as long as it remained under water, but, if the State made a riparian grant, absolutely.” This form of statement remained unchanged notwithstanding the criticism in a concurring opinion by White, J., 83 N. J. Eq. 656. But we agree with the District Court that it means no more than we have stated, and is shown to mean no more not only by the authority cited but by the following words in the opinion: 11 The title lost by erosion was then lost forever, unless it was regained by accretion, and the right of accretion was the compensation of the former owner for his loss.” We presume from this language that in New Jersey as elsewhere by the common law the right of accretion is not like the permissive right to use land still under water, but is a right as against the State as well as its grantees, when as here the grantees have not filled in the land. In some countries that inherit the Roman law the rule may be different. Ker & Co. n. Couden, 223 U. S. 268. We conclude that the conveyance by the State did not give the defendant a title to land added by accretion to the complainants’ premises, and that it does not matter that this conveyance was by metes and bounds. The boundaries however indicated were good until changed by the gradual work of the ocean and then were modified in accordance with what we believe to be the common law. Banks v. Ogden, 2 Wall. 57. The defendant’s other contention is that as the former seashore was convex the dividing lines should spread outward like a fan, and not continue the north and south divisions indicated by the extension of New Hampshire Avenue to the present or recent high-water mark. Without going into the details elaborated by the District Court we agree that since a plan was made in 1852 HART v. KEITH EXCHANGE. 271 266 Statement of the Case. showing New Hampshire Avenue as extending farther south even than at present the existing street system was adopted and recognized New Hampshire Avenue as the dividing line as well for accretions as for the fixed land. The result is that both the bill and the cross bill must be dismissed. Decree reversed. Bill and cross bill dismissed. HART v. B. F. KEITH VAUDEVILLE EXCHANGE ET AL. APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK. No. 763. Argued May 2, 3, 1923.—Decided May 21, 1923. 1. A bill in the District Court setting up a claim of federal right should not be dismissed for lack of jurisdiction because the claim is wanting in merit, if it be not wholly frivolous. P. 273. 2. Plaintiff, by a bill brought before the decision of this Court in Federal Base Ball Club v. National League, 259 U. S. 200, sought an injunction and damages, under the Anti-Trust Act of 1890, against an alleged conspiracy of theatre owners and of corporations engaged, like himself, in the business of getting contracts for vaudeville actors to perform throughout the United States, and of acting as their manager and personal representative, alleging that the business involved contracts not only for travel of performers from State to State and from abroad, but also for transportation of vaudeville acts, including performers, scenery, music, costumes, etc., resulting in a constant stream of commerce from State to State, in which, he claimed, the apparatus transported was not a mere incident, but sometimes more important than the performers. Held, that the claim that the case came within the Anti-Trust Act was not frivolous, and that the bill should not have been dismissed by the District Court for want of jurisdiction. P. 274. Reversed. Appeal from a decree of the District Court dismissing, for want of jurisdiction, a bill for an injunction and damages, brought under the Anti-Trust Act. 272 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. Mr. Martin W. Littleton, with whom. Mr. Louis B. Eppstein, Mr. Laurence H. Axman and Mr. Ira W. Hirsh-field were on the brief, for appellant. Mr. George Wharton Pepper, with whom Mr. Maurice Goodman was on the brief, for appellees. Mr. Justice Holmes delivered the opinion of the Court. This is a suit by one whose business is getting contracts for vaudeville performers to perform in theatres all over the United States and acting as their manager and personal representative. It is brought against a combination of corporations engaged in similar business, and the owners of a large number of theatres known as the Keith Circuit, the owners of others known as the Orpheum Circuit, and some other persons not needing special mention here, who it is alleged are ruining the plaintiff’s business by a conspiracy forbidden by the Anti-Trust Act of July 2,1890, c. 647, 26 Stat. 209. An injunction and enormous damages are asked. The bill was dismissed for want of jurisdiction by the District Court on the ground that it did not state a cause of action arising under the Constitution or laws of the United States. The bill sets out at superfluous length a combination of the defendants to exclude actors from the theatres controlled by them, being practically all the theatres in the United States and in Canada in which high class vaudeville entertainments are produced, and to exclude the managers and personal representatives of actors from the defendants’ booking exchange in New York and from business, unless they respectively comply with the defendants’ requirements, including the payment of considerable sums. It is alleged that a part of the defendants’ business is making contracts that call on performers to travel between the States and from abroad and in con- HART v. KEITH EXCHANGE. 273 271 Opinion of the Court. nection therewith require the transportation of large quantities of scenery, costumes and animals. Some or many of these contracts are for the transportation of vaudeville acts, including performers, scenery, music, costumes and whatever constitutes the act, so that it is said that there is a constant stream of this so-called commerce from State to State. The defendants contend and the judge below was of opinion that the dominant object of all the arrangements was the personal performance of the actors, all transportation being merely incidental to that, and therefore that the case is governed by Federal Base Ball Club v. National League, 259 U. S. 200. On the other hand it is argued that in the transportation of vaudeville acts the apparatus sometimes is more important than the performers and that the defendants’ conduct is within the statute to that extent at least. The jurisdiction of the District Court is the only matter to be considered on this appeal. That is determined by the allegations of the bill, and usually if the bill or declaration makes a claim that if well founded is within the jurisdiction of the Court it is within that jurisdiction whether well founded or not. Louisville & Nashville R. R. Co. v. Rice, 247 U. S. 201, 203. Lamar v. United States, 240 U. S. 60. Geneva Furniture Manufacturing Co. v. 8. Karpen & Bros., 238 U. S. 254, 258. The Fair v. Kohler Die & Specialty Co., 228 U. S. 22, 25. While appeals to this Court often are dismissed as frivolous, Equitable Life Assurance Society v. Brown, 187 U. S. 308, 311; Deming v. Carlisle Packing Co., 226 U. S. 102, 109, 110, the former case expressly and the latter by implication follow and reaffirm Swafford v. Templeton, 185 U. S. 487, 493, to the effect that when a suit is brought in a federal court and the very matter of the controversy is federal it cannot be dismissed for want of jurisdiction “however wanting in merit ” may be the averments intended to 51826°—23-----18 274 OCTOBER TERM, 1922. Syllabus. 262 U. S. establish a federal right. See also St. Louis, Iron Mountain & Southern Ry. Co. v. McWhirter, 229 U. S. 265, 275, 276. It is not necessary to draw the line between the foregoing and other cases brought in Courts of the United States to assert a claim under the Constitution that have been ordered to be dismissed below because “ absolutely devoid of merit,” Newburyport Water Co. v. Newburyport, 193 U. S. 561, 576, 579, beyond confining the latter to those that are very plain. It is enough that we are not prepared to say that nothing can be extracted from this bill that falls under the act of Congress, or at least that the claim is wholly frivolous. The bill was brought before the decision of the Base Ball Club Case, and it may be that what in general is incidental, in some instances may rise to a magnitude that requires it to be considered independently. The logic of the general rule as to jurisdiction is obvious and the case should be decided upon the merits unless the want of jurisdiction is entirely clear. What relief, if any, could be given and how far it could go it is not yet time to discuss. Decree reversed. EX PARTE: IN THE MATTER OF DAVIS, DIRECTOR GENERAL OF RAILROADS, ETC., PETITIONER. PETITION FOR A WRIT OF PROHIBITION AND/OR MANDAMUS. No. 27, Original. Argued on return to rule to show cause April 16, 1923.—Decided May 21, 1923. 1. Where the District Court, after due hearing, overruled objections to its jurisdiction and made an interlocutory order, held, that a mandamus from this Court was not the proper remedy for correcting its action, if erroneous. Ex parte Roe, 234 U. S. 70. P. 275. 2. Prohibition will not issue to forbid the District Court from proceeding with a suit, for want of jurisdiction, when it is not clear that jurisdiction is absent, and when there is no imperative reason EX PARTE DAVIS. 275 274 Opinion of the Court. why error, in that regard, should be corrected by prohibition rather than by appeal. Id. Rule discharged; petition denied. Petition for mandamus or prohibition to restrain the District Court from entertaining jurisdiction of a suit in admiralty to recover damages from the Director General of Railroads, for a maritime tort. Mr. T. Catesby Jones, with whom Mr. James W. Ryan, Mr. Evan Shelby and Mr. D. Roger Englar were on the briefs, for petitioner. Mr. Mark Ash, with whom Mr. Edward Ash was on the briefs, for respondent. Mr. Justice McReynolds delivered the opinion of the Court. The petitioner seeks a writ of prohibition or mandamus commanding the judges of the District Court, Southern District of New York, not to take further steps in an admiralty proceeding instituted by the New Jersey Shipbuilding & Dredging Company to recover from him for damage inflicted upon its scow by the Lehigh Valley Railroad Company’s steamtug “ Mahanoy ” while under federal control, or in the alternative to direct vacation of an interlocutory order theretofore entered and dismiss the libel. A rule to show cause issued out of this Court and return has been made showing the relevant facts and circumstances. The District Court after hearing ruled upon the matters presented for its determination and, under settled doctrine, we can find no occasion for mandamus. Ex parte Roe, 234 U. S. 70. Involved in the cause are questions touching the liability of the Director General of Railroads as Agent designated by the President under the Transportation Act of 1920 for maritime torts committed by vessels un- 276 OCTOBER TERM, 1922. Syllabus. 262 U. 8. der federal control; his power to enter appearance by counsel without prior service of process; and whether in the same proceeding he may take different and antagonistic positions, first as the agent of one railroad system and then of another. We cannot say the court below was clearly without jurisdiction to determine all the points presented. Moreover, by appeal in the ordinary way possible errors can be corrected; and there is no imperative reason for awarding a writ of prohibition. Ex parte Gordon, 104 U. S. 515; Ex parte Pennsylvania, 109 U. S. 174; In re Cooper, 143 U. S. 472, 495; In re Morrison, 147 U. S. 14; In re New York tfc Porto Rico S. S. Co., 155 U. S. 523; Ex parte Chicago, Rock Island & Pacific Ry. Co., 255 U. S. 273, 275, 280. The rule to show cause is discharged and the prayer of the petition is denied. Rule discharged. STATE OF MISSOURI EX REL. SOUTHWESTERN BELL TELEPHONE COMPANY v. PUBLIC SERVICE COMMISSION OF MISSOURI, ET AL. ERROR TO THE SUPREME COURT OF THE STATE OF MISSOURI. No. 158. Argued December 8, 1922.—Decided May 21, 1923. 1. Rates fixed by state authority for a public utility corporation must be such as will yield a fair return upon the value of its property devoted to the public service. P. 287. 2. What will amount to a fair return cannot be ascertained by valuing the property as of past times without giving consideration to greatly increased costs of labor, supplies, etc., prevailing at the time of the investigation. Id. 3. An honest and intelligent forecast of probable future values is also essential, and this cannot be made if the highly important element of present costs be wholly disregarded. Id. 4. Rates admitting of a possible return of but 54%, in net profits after allowing for depreciation, on the minimum value of the prop- S. W. TEL. CO. v. PUB. SERV. COMM. 277 276 Argument for Plaintiff in Error. erty of a telephone company, held wholly inadequate, considering the character of the investment and the interest rates then prevailing. P. 288. 5. A state commission, in fixing the rates of a public utility corporation, cannot substitute its judgment for the honest discretion of the company’s board of directors respecting the necessity and reasonableness of expenditures made in the operations of the company. Id. 233 S. W. 425, reversed. Error to a judgment of the Supreme Court of Missouri affirming a judgment of the State Circuit Court, which sustained an order by which the Public Service Commission undertook to reduce the rates of the above-named telephone company and to abolish installation and moving charges. Mr. Frederick W. Lehmann, with whom Mr. J. W.. Gleed, Mr. Thos. 0. Stokes, Mr. Claude Nowlin and Mr. E. W. Clausen were on the briefs, for plaintiff in error. The value of the property found by the Commission was not its present value, but was its actual cost, or its value in 1913, plus net additions since, its present value being ignored, the value found being far below the present value of the property, with the result that the rates prescribed were confiscatory in their effect and operation. §§ 10511, 10502, R. S. Mo. 1919; Willcox v. Consolidated Gas Co., 212 U. S. 19; Minnesota Rate Cases, 230 U. S. 352; Lincoln Gas Co. v. Lincoln, 250 U. S. 256; City Light & Traction Co. of Sedalia, 8 Mo. P. S. C. 204; Hurst v. Chicago, Burlington & Quincy Ry. Co., 280 Mo. 566; Elizabethtown Gas Co. v. Public Utility Commissioners, 95 N. J. L. 18. Valuation, though described as tentative, must be as of the date of determination, and rates prescribed, though designated as temporary, must be just and reasonable. §§ 10502, 10511, R. S. Mo. 1919; Columbia Tel. Co. v. Atkinson, 271 Mo. 28; Galveston Electric Co. v. Galves- 278 OCTOBER TERM, 1922. Argument for Plaintiff in Error. 262 U. S. ton, 258 U. S. 388; New York Tel. Co. v. Prendergast, U. S. D. C., So. D. N. Y., May 26,1922; Potomac Electric Power Co. v. Public Utilities Comm., 276 Fed. 327. The findings of the Commission as to the value of the property were made under a mistake of law, are entirely without support in the evidence, and are against the evidence of indisputable character in the case. The rates prescribed by the Commission are therefore without legal effect and void. §§ 10502, 10511 (2), R. S. Mo. 1919; State Public Utilities Comm. v. Toledo, etc., Ry. Co., 286 Ill. 582; Springfield v. Springfield Gas Co., 291 Ill. 209; State v. Great Northern Ry. Co., 135 Minn. 19; Interstate Commerce Comm. v. Union Pacific R. R. Co., 222 U. S. 541 ; Interstate Commerce Comm. v. Louisville & Nashville R. R. Co., 227 U. S. 88. The Commission’s calculation of expenses was far below what was actually and necessarily incurred in the operation of the property and resulted in a showing of net earnings far beyond what was realized, and, the reduced rates being predicated on such showing, there was a talcing and appropriation of the Company’s property without due process of law and a denial of the equal protection of the law. The annual charge for depreciation is estimated by the Commission upon an undervaluation of the property and is entirely inadequate. Increase in wages made in July and August, 1919, were not taken into full account by the Commission. The four and one-half per cent payment under the license contract with the American Telephone & Telegraph Company is a legitimate item of expense. Houston n. Southwestern Bèll Tel. Co., 259 U. S. 318; Chesapeake & Potomac Tel: Co. v. Manning, 186 U. S. 239; Interstate Commerce Comm. v. Chicago Great Western Ry. Co., 209 U. S. 108; Chicago, Milwaukee & St. Paul Ry. Co. v. Wisconsin, 238 U. S. 491; People ex rei. v. S. W. TEL. CO. v. PUB. SERV. COMM. 279 276 Argument for Defendants in Error. Stevens, 197 N. Y. 1; Bacon n. Boston & Maine R. R., 83 Vt. 421; Atlantic Coast Line R. R. Co. v. North Carolina, 206 U. S. 1; Spring field v. Spring field Gas & Electric Co., 291 Ill. 209. Charges for installation, moving, etc., were wrongfully disallowed. § 10218, R. S. Mo. 1919; Interstate Commerce Comm. v. Chicago Great Western Ry. Co., 209 U. S. 108; Smyth v. Ames, 169 U. S. 466; Interstate Commerce Comm. n. Stickney, 215 U. S. 98. No question as to division of rates on long distance messages is involved in this suit. Houston v. Southwestern Bell Tel. Co., 259 U. S. 318. The Commission’s allowance of 6.81 per cent per annum for return, surplus and contingencies on the tentative value of $20,400,000 did not permit a fair return on the property used in the service. Mr. L. H. Breuer and Mr. James D. Lindsay for defendants in error. The Supreme Court of Missouri gave to the findings of the Commission no more weight than that of a presumption of right action, and asserted and exercised the right to review the evidence for itself, and to make its own findings of fact, unhampered by the findings of the Commission. § 10522, R. S. Mo. 1919; Chicago, Burlington & Quincy R. R. Co. v. Public Service Comm., 266 Mo. 333; Lusk n. Atkinson, 271 Mo. 155; Ozark P. & W. Co. v. Commission, 287 Mo. 522. Upon writ of error to the highest court of the State, this Court will not review the evidence further than to ascertain that the finding of facts by the state court, upon which depends the asserted constitutional right in issue, is supported by substantial evidence. Northern Pacific Ry. Co. v. North Dakota, 236 U. S. 585; Truax v. Corrigan, 257 U. S. 312; Cedar Rapids Gas Light Co. v. Cedar Rapids, 223 U. S. 655; Ohio Valley Water Co. v. Ben Avon 280 . OCTOBER TERM, 1922. Argument for Defendants in Error. 262 U. S. Borough, 253 U. S. 287; Interstate Commerce Comm. v. Union Pacific R. R. Co., 222 U. S. 541. The Supreme Court of Missouri found, upon a review of the evidence, that the rates established by the Commission were not confiscatory, nor unreasonable, and that the rates were calculated upon the basis of the fair value of the property of the company, being used and useful in the service of the public. These findings of fact are supported by substantial evidence, are not arbitrary nor capricious, and will not be set aside by this Court upon writ of error. San Diego Land & Town Co. v. Jasper, 189 U. S. 439; Louisiana R. R. Comm. v. Cumberland Tel. Co., 212 U. S. 414; Portland Ry. Light & Power Co. v. Oregon R.R. Comm., 229 U. S. 397; Darnell v. Edwards, 244 U. S. 564; New York & Queens Gas Co. v. McCall, 245 U. S. 545. The decision of the highest court of the State, upon a review of all the evidence, sustaining the orders of an administrative commission, which are temporary in effect and duration, and which expressly give to the complainant the right at any time thereafter, without prejudice, to reopen the issues involved, should not be set aside upon review on writ of error, solely because the Court may differ in its view as to where lies the greater weight of the evidence, or the more expedient solution of the administrative issues involved. Cedar Rapids Gas Light Co. v. Cedar Rapids, 223 U. S. 655; Galveston Electric Co. v. Galveston, 258 U. S. 388; Knoxville v. Knoxville Water Co., 212 U. S. 1; Willcox v. Consolidated Gas Co., 212 U. S. 19; Houston v. Southwestern Bell Tel. Co., 259 U. S. 318. There is no constitutional or inherent right in the utility company, on the one hand, or, in the public, on the other, which imperatively demands that the fair value of property devoted to a public service, shall be determined upon estimated cost of reproduction new, either in a time of S. W. TEL. CO. v. PUB. SERV. COMM. 281 276 Opinion of the Court. abnormally high prices, or in a time of abnormally low prices; and a finding made in view of the various tests of value, supported by substantial evidence, and approved upon judicial review by the highest court of a State, should not be set aside because the state commission and the state court did not approve a valuation made at prices prevailing in an abnormal period; and particularly so, when the findings are tentative, and the rates temporary, and a reopening of the issues is expressly permitted. Smyth v. Ames, 169 U. S. 466; Minnesota Rate Cases, 230 U. S. 351; Brooklyn Borough Gas Co. v. Public Service Comm., P. U. R. 1918 F, 335. A net return of 6.81 per cent is not confiscatory, nor unreasonable; and particularly so, under an order tentative and temporary in character and duration. Federal Control Act, as amended, 40 Stat. 451, § § 1, 16; Interstate Commerce Act, § 15-a, added by Transportation Act 1920, 41 Stat. 488; Willcox v. Consolidated Gas Co., 212 U. S. 19; Denver v. Denver Union Water Co., 246 U. S. 178; Lincoln Gas Co. v. Lincoln, 250 U. S. 256. The disallowance of installation and moving charges is not reversible error, the revenue from other sources not being unreasonably low. The allowance of such charges was not mandatory upon the Commission. Their allowance or disallowance is a question of expediency or policy of regulation, and not of power, or of undue interference with the management of the property. Baltimore & Ohio R. R. Co. v. Pitcairn Coal Co., 215 U. S. 481; Minneapolis & St. Louis R. R. Co.-^. Minnesota, 193 U. S. 53; Oregon R. R. & Nav. Co. v. Fairchild, 224 U. S. 510. Mr. Justice McReynolds delivered the opinion of the Court. The Supreme Court of Missouri (233 S. W. 425) affirmed a judgment of the Cole County Circuit Court 282 262 U. S. OCTOBER TERM, 1922. Opinion of the Court. which sustained an order of the Public Service Commission of Missouri, effective December 1, 1919. That order undertook to reduce rates for exchange service and to abolish the installation and moving charges theretofore demanded by plaintiff in error. It is challenged as confiscatory and in conflict with the Fourteenth Amendment. During the period of federal control—August 1, 1918, to August 1, 1919—the Postmaster General advanced the rates for telephone service and prescribed a schedule of charges for installing and moving instruments. The Act of Congress approved July 11, 1919, c. 10, 41 Stat. 157, directed that the lines be returned to their owners at midnight July 31, 1919, and further— “That the existing toll and exchange telephone rates as established or approved by the Postmaster General on or prior to June 6, 1919, shall continue in force for a period not to exceed four months after this Act takes effect, unless sooner modified or changed by the public authorities—State, municipal, or otherwise—having control or jurisdiction of tolls, charges, and rates or by contract or by voluntary reduction.” August 4, 1919, the Commission directed plaintiff in error to show why exchange service rates and charges for installation and moving as fixed by the Postmaster General should be continued. After a hearing, it made an elaborate report and directed that the service rates should be reduced and the charges discontinued. The Company produced voluminous evidence, including its books, to establish the value of its property dedicated to public use. The books showed that-the actual cost of “total plant, supplies, equipment and working capital,” amounted to $22,888,943. Its engineers estimated the reproduction cost new as of June 30, 1919, thus—Physical telephone property, $28,454,488; working capital, $1,051,564; establishing business, $5,594,816; total $35,100,868. They also estimated existing values S. W. TEL. CO. V. PUB. SERV. COMM. 283 276 Opinion of the Court. (after allowing depreciation) upon the same date—Physical telephone property, $24,709,295; working capital, $1,051,564; establishing business, $5,594,816; total, $31,355,675. The only evidence offered in opposition to values claimed by the Company, were appraisals of its property at St. Louis, Caruthersville and Springfield, respectively, as of December 1913, February 1914 and September 1916, prepared by the Commission’s engineers and accountants, together with statements showing actual cost of additions subsequent to those dates. Omitting a paragraph relative to an unimportant reduction—$17,513.52—from working capital account, that part of the Commission’s report which deals with property values follows. “The Company offered in evidence exhibits showing the value of its property in the entire State (outside the cities of Kansas City and Independence, whose rates are not involved in this case), and also at forty-six of its local exchanges in the State. It shows by such exhibits that the value of the property in the entire State (and when speaking of the property in the State in this report we mean exclusive of Kansas City and Independence) is as follows: Reproduction cost new, $35,100,471; reproduction cost new, less depreciation, $31,355,278; and cost as per books, $22,888,943. It also shows the Company’s estimate of reproduction cost new, reproduction cost new less depreciation, and the prorated book cost, at each of the forty-six local exchanges mentioned. “The engineers of this Commission have made a detailed inventory and appraisal and this Commission has formally valued the Company’s property at only three of its exchanges, viz: at the City of Caruthersville, reported in re Southwestern Tel. & Tel. Company, 2 Mo. P. S. C. 492; at the City of St. Louis in cases No. 234 and No. 235 as yet unreported; and at the City of Springfield, reported 284 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. in re Missouri and Kansas Telephone Company, 6 Mo. P. S. C. 279, and as a result we have only the estimates and appraisals of the Company before us in relation to the. value of the property at the other exchanges. We think it is clear, however, from the data at hand that the values placed by the Company upon the property are excessive and not a just basis for rate making. “ The values fixed by this Commission at Caruthersville, St. Louis and Springfield in the cases above mentioned aggregate $11,003,898, while the Company estimates the aggregate cost of reproduction new of these plants in this case at $18,971,011. The ratio of the latter figure is 172.4 per cent. This percentage divided into $35,100,471, the Company’s estimate of the aggregate cost of reproduction new of its property in Missouri in this case, equals $20,350,000, which might be said to be one measure of the value of the property. “Again, the Company’s estimate of the aggregate cost of reproduction new, less depreciation, of its properties at Caruthersville, St. Louis and Springfield, in this case is $16,913,673. The ratio of this figure to the aggregate value fixed by the Commission at these exchanges, plus additions reported by the Company, is 153.7 per cent. This percentage divided into $31,355,278, the Company’s estimate of the aggregate cost of reproduction new, less depreciation, of its property in Missouri in this case, equals $20,400,000, which may be said to be another measure of the value of the property. “ The Company also shows by Exhibits 19 and 212 that its return under the Postmaster General’s rates on $22,888,943, the book value of its property in the State, is at the rate of 11.65 per cent per annum for depreciation and return on the investment, which would yield the Company 6 per cent for depreciation and 5.65 per cent for return on the book cost of the property. As stated, however, we do not think that the book cost or the S. W. TEL. CO. v. PUB. SERV. COMM. 285 276 Opinion of the Court. ‘ prorated book cost ’ of the property as claimed by the Company would be a fair basis for rate making. “As we understand it, the 1 prorated book cost ’ given in evidence by the Company for the various exchanges is simply the percentage relation of reproduction cost new which the original cost of all property bears to reproduction cost new of all property and in individual instances the actual cost might vary greatly, either up or down, from what an appraisal would show. If the Company, to eliminate competition, paid a price in excess of the value or because of discouraged local operation were enabled to purchase a plant far below its actual value, the * prorated book cost ’ basis would not reflect anything like the original cost. “We also think that the figure of $22,888,943, claimed by the Company to represent the book cost or original cost of its property in the State, is subject to certain adjustments with reference to the amount of non-useful property included, working capital, and the amount to be deducted account extinguished value recouped from patrons by charges to depreciation. “ In the St. Louis case, supra, the original cost of the non-useful property deducted and disallowed by the Commission amounted to $454,689.16. It appears from the Company’s Exhibit 256 that the 1 prorated book cost ’ of the St. Louis exchange is just about half of that given for the State. However, it is clear that the proportion of non-used and non-useful property in St. Louis bears a much larger percentage relation to useful property than would obtain throughout the State. It would appear that estimating the Company’s property not used and useful for the entire State at $500,000 would be a fair approximation. This sum at least should be deducted. . . . “ The depreciation reserve applicable to the Missouri property is not shown by the Company. However, on 286 OCTOBER TERM, 1922. Opinion of the Court. 262 U. S. the Company’s Exhibit 15, the balance sheet as of June 30, 1919, of the Southwestern Bell Telephone Company (Missouri corporation) operating in Missouri, Kansas and Arkansas, the reserve for accrued depreciation and reserve for amortization of intangibles is given as $7,963,082.37. The same exhibit shows the original cost of fixed capital for Missouri, Kansas and Arkansas property as $46,061,162.76. The total fixed capital of the Missouri property shown on the Company’s Exhibit 19 is $21,837,759, which is 47.4 per cent of $46,061,162.76 and 47.4 per cent of the reserve for depreciation, $7,963,082.37 equals $3,774,501, or the portion assignable to the Missouri property. “Adjusting in accordance with the above, we have: Total plant and equipment, including working capital, as per Company’s Exhibit No. 19, $22,888,943. Deduct property not used or useful, $500,000.00; deduct excess working capital, $17,513.52; deduct depreciation reserve, $3,774,501.00; [total to be deducted] $4,292,014.52. [Net total] $18,596,928.48; add for intangibles, 10 per cent, $1,859,692.85; total adjusted original cost, $20,-456,621.33. “After carefully considering all the evidence as to values before us in this case, we are of the opinion that the value of the Company’s property in the State, exclusive of Kansas City and Independence, devoted to exchange service, will not exceed the sum of $20,400,000, and we will tentatively adopt this sum as the value of the property for the purposes of this case. As stated supra, this Commission has formally valued only a part of this property, and we should not be understood as authoritatively fixing the value of the property at this time.” The three earlier valuations to which the Commission referred are—St. Louis, December 1913, $8,500,000; Caruthersville, February 1914, $25,000; Springfield, Sep- S. W. TEL. CO. v. PUB. SERV. COMM. 287 276 Opinion of the Court. tember 1916, $815,000; total, $9,340,000. Between those dates and June 30, 1919, additions were made to these properties which cost, respectively, $1,623,765, $5,992 and $34,141. Adding these to the original valuations gives $11,003,898, the base sum used by the Commission for the estimates now under consideration. Obviously, the Commission undertook to value the property without according any weight to the greatly enhanced costs of material, labor, supplies, etc., over those prevailing in 1913, 1914 and 1916. As matter of common knowledge, these increases were large. Competent witnesses estimated them as 45 to 50 per centum. In Willcox v. Consolidated Gas Co., 212 U. S. 19, 41, 52, this Court said: “ There must be a fair return upon the reasonable value of the property at the time it is being used for the public. . . . And we concur with the court below in holding that the value of the property is to be determined as of the time when the inquiry is made regarding the rates. If the property, which legally enters into the consideration of the question of rates, has increased in value since it was acquired, the company is entitled to the benefit of such increase.” In the Minnesota Rate Cases, 230 U. S. 352, 454, this was said: “ The making of a just return for the use of the property involves the recognition of its fair value if it be more than its cost. The property is held in private ownership and it is that property, and not the original cost of it, of which the owner may not be deprived without due process of law.” See also Denver v. Denver Union Water Co., 246 U. S. 178, 191; Newton v. Consolidated Gas Co., 258 U. S. 165 (March 6, 1922); and Galveston Electric Co. v. Galveston, 258 U. S. 388 (April 10, 1922). It is impossible to ascertain what will amount to a fair return upon properties devoted to public service with 288 OCTOBER TERM, 1922. Opinion of the Court. 262U.S. out giving consideration to the cost of labor, supplies, etc., at the time the investigation is made. An honest and intelligent forecast of probable future values made upon a view of all the relevant circumstances, is essential. If the highly important element of present costs is wholly disregarded such a forecast becomes impossible. Estimates for to-morrow cannot ignore prices of to-day. Witnesses for the Company asserted—and there was no substantial evidence to the contrary—that excluding cost of establishing the business the property was worth at least 25% more than the Commission’s estimates, and we think the proof shows that for the purposes of the present case the valuation should be at least $25,000,000. After disallowing an actual expenditure of $174,048.60 for rentals and services by the American Telephone & Telegraph Company and some other items not presently important, the Commission estimated the annual net profits on operations available for depreciation and return as $2,828,617.60—approximately 11|% of $25,000,-000. That 6% should be allowed for depreciation appears to be accepted by the Commission. Deducting this would leave a possible 5|% return upon the minimum value of the property, which is wholly inadequate considering the character of the investment and interest rates then prevailing. The important item of expense disallowed by the Commission—$174,048.60—is 55% of the 4|% of gross revenues paid by plaintiff in error to the American Telephone & Telegraph Company as rents for receivers, transmitters, induction coils, etc., and for licenses and services under the customary form of contract between the latter Company and its subsidiaries. Four and one-half per cent, is the ordinary charge paid voluntarily by local companies of the general system. There is nothing to indicate bad faith. So far as appears, plaintiff in error’s board of directors has exercised a proper discretion about this matter S. W. TEL. CO. v. PUB. SERV. COMM. 289 276 Opinion of Brandeis and Holmes, JJ. requiring business judgment. It must never be forgotten that while the State may regulate with a view to enforcing reasonable rates and charges, it is not the owner of the property of public utility companies and is not clothed with the general power of management incident to ownership. The applicable general rule is well expressed in State Public Utilities Commission ex rel. Spring field v. Spring field Gas and Electric Company, 291 Ill. 209, 234. “ The commission is not the financial manager of the corporation and it is not empowered to substitute its judgment for that of the directors of the corporation; nor can it ignore items charged by the utility as operating expenses unless there is an abuse of discretion in that regard by the corporate officers.” See Interstate Commerce Commission n. Chicago Great Western Ry. Co., 209 U. S. 108; Chicago, Milwaukee & St. Paul R. R. Co. v. Wisconsin, 238 U. S. 491; People ex rel. v. Stevens, 197 N. Y. 1. Reversed. Mr. Justice Brandeis dissenting from opinion, with whom Mr. Justice Holmes concurs. I concur in the judgment of reversal. But I do so on the ground that the order of the state commission prevents the utility from earning a fair return on the amount prudently1 invested in it. Thus, I differ fundamentally from my brethren concerning the rule to be applied in determining whether a prescribed rate is confiscatory. The Court, adhering to the so-called rule of Smyth v. Ames, 1 The term prudent investment is not used in a critical sense. There should not be excluded from the finding of the base, investments which, under ordinary circumstances, would be deemed reasonable. The term is applied for the purpose of excluding what might be found to be dishonest or obviously wasteful or imprudent expenditures. Every investment may be assumed to have been made in the exercise of reasonable judgment, unless the contrary is shown. 51826°—23--------19 290 OCTOBER TERM, 1922. Opinion of Brandeis and Holmes, JJ. 262 U. S. 169 U. S. 466, and further defining it, declares that what is termed value must be ascertained by giving weight, among other things, to estimates of what it would cost to reproduce the property at the time of the rate hearing. The so-called rule of Smyth v. Ames is, in my opinion, legally and economically unsound. The thing devoted by the investor to the public use is not specific property, tangible and intangible, but capital embarked in the enterprise. Upon the capital so invested the Federal Constitution guarantees to the utility the opportunity to earn a fair return.2 Thus, it sets the limit to the power of the State to regulate rates. The Constitution does not guarantee to the utility the opportunity to earn a return on the value of all items of property used by the utility, or of any of them. The several items of property constituting the utility, taken singly, and freed from the public use, may conceivably have an aggregate value greater than if the items are used in combination. The owner is at liberty, in the absence of controlling statutory provision, to withdraw his property from the public service; and, if he does so, may obtain for it exchange value. Compare Brooks-Scanlon Co. v. Railroad Commission of Louisiana, 251 U. S. 396; Erie R. R. Co. v. Public Utility Commissioners, 254 U. S. 394, 411; Texas v. Eastern Texas R. R. Co., 258 U. S. 204. But so long as the specific items of property are employed by the utility, their exchange value is not of legal significance. The investor agrees, by embarking capital in a utility, that its charges to the public shall be reasonable. ’Except that rates may, in no event, be prohibitive, exorbitant, or unduly burdensome to the public. Covington & Lexington Turnpike Road Co. v. Sandford, 164 U. S. 578, 596; Smyth v. Ames, 169 U. S. 466, 544; San Diego Land & Town Co. v. National City, 174 U. S. 739, 757; Minnesota Rate Cases, 230 U. S. 352, 454; Mr. Justice Miller in Chicago, Milwaukee & St. Paul Ry. Co. v. Minnesota, 134 U. S. 418, 459. S. W. TEL. CO. V. PUB. SERV. COMM. 291 276 Opinion of Brandeis and Holmes, JJ. His company is the substitute for the State in the performance of the public service; thus becoming a public servant. The compensation which the Constitution guarantees an opportunity to earn is the reasonable cost of conducting the business. Cost ihcludesl not only operating expenses, but also capital charges. Capital charges cover the allowance, by way of interest, for the use of the capital, whatever the nature of the security issued therefor; the allowance for risk incurred; and enough more to attract capital. The reasonable rate to be prescribed by a commission may allow an efficiently managed utility much more. But a rate is constitutionally compensatory, if it allows to the utility the opportunity to earn the cost of the service as thus defined. To decide whether a proposed rate is confiscatory, the tribunal must determine both what sum would be earned under it, and whether that sum would be a fair return. The decision involves ordinarily the making of four subsidiary ones: 1. What the gross earnings from operating the utility under the rate in controversy would be. (A prediction.) 2. What the operating expenses and charges, while so operating, would be. (A prediction.) 3. The rate-base, that is, what the amount is on which a return should be earned. (Under Smyth v. Ames, an opinion, largely.) 4. What rate of return should be deemed fair. (An opinion, largely.) A decision that a rate is confiscatory (or compensatory) is thus the resultant of four subsidiary determinations. Each of the four involves forming a judgment, as distinguished from ascertaining facts. And as to each factor, there is usually room for difference in judgment. But the first two factors do not ordinarily present serious difficulties. The doubts and uncertainties incident to 292 OCTOBER TERM, 1922. Opinion of Brandeis and Holmes, JJ. 262 U. S. prophecy, which affect them, can, often, be resolved by a test period; and meanwhile protection may be afforded by giving a bond. Knoxville v. Knoxville Water Co., 212 U. S. 1, 18, 19; St. Louis, Iron Mountain & Southern Ry. Co. v. McKnight, 244 U. S. 368. The doubts and uncertainties incident to the last two factors can be eliminated, or lessened, only by redefining the rate base, called value, and the measure of fairness in return, now applied under the rule of Smyth n. Ames. The experience of the twenty-five years since that case was decided has demonstrated that the rule there enunciated is delusive. In the attempt to apply it insuperable obstacles have been encountered. It has failed to afford adequate protection either to capital or to the public. It leaves open the door to grave injustice. To give to capital embarked in public utilities the protection guaranteed by the Constitution, and to secure for the public reasonable rates, it is essential that the rate base be definite, stable, and readily ascertainable; and that the percentage to be earned on the rate base be measured by the cost, or charge, of the capital employed in the enterprise. It is consistent with the Federal Constitution for this Court now to lay down a rule which will establish such a rate base and such a measure of the rate of return deemed fair. In my opinion, it should do so. The rule of Smyth n. Ames sets the laborious and baffling task of finding the present value of the utility. It is impossible to find an exchange value for a utility, since utilities, unlike merchandise or land, are not commonly bought and sold in the market. Nor can the present value of the utility be determined by capitalizing its net earnings, since the earnings are determined, in large measure, by the rate which the company will be permitted to charge; and, thus, the vicious circle would be encountered. So, under the rule of Smyth v. Ames, it is usually sought to prove the present value of a utility by ascer- S. W. TEL. CO. V. PUB. SERV. COMM. 293 276 Opinion of Brandeis and Holmes, JJ. taining what it actually cost to construct and instal it; or by estimating what it should have cost; or by estimating what it would cost to reproduce, or to replace, it. To this end an enumeration is made of the component elements of the utility, tangible, and intangible.3 Then the actual, or the proper, cost of producing, or of reproducing, each part is sought. And finally, it is estimated* how much less than the new each part, or the whole, is 8 In estimating replacement cost the first step is to determine what part of the property owned is used and useful in the public service. That involves, among other things, a consideration of retired or discarded property and the question whether the size and capacity of the plant are, in part, excessive. The property included in the valuation is commonly treated under the following heads (See Report of Special Committee on Valuation, Amer. Society of Civil Engineers, October 28, 1916, Vol. 42 Proceedings, pp. 1708-1938): A. Tangibles: (a) Land and buildings. (b) Plant. B. Incidentals during construction: (a) Administration. (b) Engineering and superintendence. (c) Legal expenses. (d) Brokerage. (e) Promotion fees. (f) Insurance. (g) Taxes. (h) Bond discount. (i) Contingencies. C. Intangibles: (a) Good will. (b) Franchise value. (c) Going concern value. (d) Working capital. “ Going value ” was declared by the Special Report (p. 1727) to embrace, among other things, “ efficiency, favorable business arrangements and design”; intangibles to include also “leases, easements, water rights, traffic and operating agreements, strategic location and advantages and other privileges.” 294 OCTOBER TERM, 1922. Opinion of Brandeis and Holmes, JJ. 262U.S. worth. That is, the depreciation is estimated.4 Obviously each step in the process of estimating the cost of reproduction, or replacement, involves forming an opinion, or exercising judgment, as distinguished from merely ascertaining facts. And this is true, also, of each step in the process of estimating how much less the exist-' ing plant is worth, than if it were new. There is another potent reason why, under the rule of Smyth v. Ames, the room for difference in opinion as to the present value of a utility is so wide. The rule does not measure the present value either by what the utility cost to produce; or by what it should have cost; or by what it would cost to reproduce, or to replace, it.5 Under that rule the tribunal is directed, in forming its judgment, to take into consideration all those and also, other elements, called relevant facts.6 4Several different methods are used for measuring depreciation: (1) The replacement method; (2) the straight-line method; (3) the compound interest method; (4) the sinking fund method; (5) the unit cost method. It is largely a matter of judgment whether, and to what extent, any one of these several methods of measuring depreciation should be applied. They may give widely different results. Special Report, October 28, 1916, Valuation of Public Utilities, Amer. Society of Civil Engineers, Vol. 42 Proceedings, pp. 1723-1727; 1846-1900. 8 This Court declared in Smyth v. Ames, 169 U. S. 466, 547, that “ present as compared with original cost of construction ” is to be considered; and in Minnesota Rate Cases, 230 U. S. 352, 452, that “ the cost-of-reproduction method is of service in ascertaining the present value of the plant, when it is reasonably applied and when the cost of reproducing the property may be ascertained with a proper degree of certainty.” Reproduction cost was thus held to be evidence of value. But it has never been held to be the measure of value. ’Some of these so-called relevant facts are, as the rule has been applied: (a) Capitalization, i. e., bonds, stock, and other securities outstanding. (b) Book cost, i. e., the investment account as shown on the books. S. W. TEL. CO. v. PUB. SERV. COMM. 295 276 Opinion of Brandeis and Holmes, JJ. Obviously 11 value ” cannot be a composite of all these elements. Nor can it be arrived at on all these bases. They are very different; and must, when applied in a particular case, lead to widely different results. The rule of Smyth v. Ames, as interpreted and applied, means merely that all must be considered. What, if any, weight shall be given to any one, must practically rest in the judicial discretion of the tribunal which makes the deter- (c) Actual cost, i. e., amounts actually paid in cash for installing the original plant and business, and the additions thereto. (d) Historical cost, i. e., the proper cost of the existing plant and business, estimated on the basis of the price levels existing at the respective dates when the plant and the additions were constructed. This is often called prudent investment. Historical cost would, under normal conditions, be equal in amount to the original cost. The phrases are sometimes used to denote the same thing. But they are not the same; and they are often ascertained by different processes. Original cost is the amount actually paid to establish the utility. The amount is ascertained, where possible, by inspection of books and vouchers, and by other direct evidence. If this class of evidence is not complete, it may be necessary to supplement it by evidence as to what was probably paid for some items, by showing prices prevailing for work and materials at the time the same were supplied. But the evidence of these prices is merely circumstantial, or corroborative, evidence of the amount actually paid. In determining actual cost, whatever the evidence, there is no attempt to determine whether the expenditure was wise or foolish, or whether it was useful or wasteful. Historical cost, on the other hand, is the amount which normally should have been paid for all the property which is usefully devoted to the public service. It is, in effect, what is termed the prudent investment. In enterprises efficiently launched and developed, historical cost and original cost would practically coincide both in items included and in amounts paid. That is, the subjects of expenditure would coincide; and the cost at prices prevailing at the time of installation would substantially coincide with the actual cost. (e) Reproduction cost of plant and business—estimated on price levels prevailing at the date of valuation. (f) Reproduction cost of plant and business, estimated on average price levels prevailing during periods of, say, 5 to 10 years preceding the valuation. 296 OCTOBER TERM, 1922. Opinion of Brandeis and Holmes, JJ. 262 U. S. mination. Whether a desired result is reached may depend upon how any one of many elements is treated. It is true that the decision is usually rested largely upon records of financial transactions, on statistics and calculations. But as stated in Louisville v. Cumberland Telegraph & Telephone Co., 225 U. S. 430, 436, “ every figure . . . that we have set down with delusive exactness ” is “ speculative.” The efforts of courts to control commissions’ findings of value have largely failed. The reason lies in the character of the rule declared in Smyth v. Ames. The rule there stated was to be applied solely as a means of determining whether rates already prescribed by the legislature were confiscatory. It was to be applied judicially after the rate had been made; and by a court which had had no part in making the rate. When applied under such circumstances the rule, although cumbersome, may occasionally be effective in destroying an obstruction to justice, as the action of a court is, when it sets aside the verdict of a jury. But the commissions undertook to make the rule their standard for constructive action. They used it as a guide for making, or approving, rates. And the tendency developed to fix as reasonable, the rate which is not so low as to be confiscatory.7 Thus the rule which assumes that rates of utilities will ordinarily be higher than the minimum required by the Constitution has, by the practice of the commissions, eliminated the margin between a reasonable rate and a merely compensatory rate; and, in the process of rate making, effective judicial review is very often rendered impossible.8 The ’ This, it appears, was the purpose of the board in Galveston Electric Co. v. Galveston, 258 U. S. 388. 8 A rate order will not be set aside, unless the evidence compels conviction that a fair-minded board could not have reached the conclusion that the rate would prove adequate. San Diego Land & Town Co. v. National City, 174 U. S. 739, 754; San Diego Land & Town Co. v. Jasper, 189 U. S. 439, 442; Knoxville v. Knoxville Water S. W. TEL. CO. v. PUB. SERV. COMM. 297 276 Opinion of Brandeis and Holmes, JJ. result, inherent in the rule itself, is arbitrary action, on the part of the rate regulating body. For the rule not Co., 212 U. S. 1, 17; Van Dyke v. Geary, 244 U. S. 39, 49; Galveston Electric Co. v. Galveston, 258 U. S. 388, 401, 402. The range for difference of opinion on each of the many factors to be taken into consideration in fixing the rate base is so wide that such compelling evidence can rarely be adduced, where the report filed recites that, after full hearing, all the so-called relevant facts were given consideration by the commission in reaching the decision made. There may often be found in opinions of utility commissions, after a lengthy and detailed discussion of a vast quantity of expert opinion, a conclusion like the following from Re Illinois Northern Utilities Co., P. U. R. 1920 D, 979, 999: “After considering all the evidence and arguments of counsel in this case, bearing upon the valuation of the properties herein involved, the investment therein, their original costs, cost to reproduce, and present values, including all overheads; preliminary costs; costs of engineering; supervision, interest, insurance, organization and legal expenses during construction; working capital; materials and supplies; and all other elements of value, tangible and intangible, and considering the plants are now going concerns in successful operation, the Commission finds . . for the purposes of this proceeding, and for those purposes only, the fair rate-making values . . as follows.” Hence, a commission’s order must ordinarily be allowed to stand, unless it appears that there was some irregularity in the proceedings or that some erroneous rule of law was applied. Since Smyth v. Ames this Court has dealt with the validity (under the Fourteenth Amendment) of rate regulation by the States in over 50 cases. In only 25 of these has the Court passed upon the question whether a rate fixed, or approved, by a state commission denied to the utility the opportunity of earning a fair return upon the fair value of the property. In none of these 25 cases has an order of a state commission, made after a full hearing, been declared void by this Court, on the ground that the finding of the rate-base, or value, was too low. In none of them has the order been declared void on the ground that the commission fixed too low a percentage of return. Lower federal courts and state courts have occasionally intervened with effect. But the instances are relatively few as compared with the number of adverse decisions of the commissions. Even where orders fixing rates have been set aside for irregularity or error, the result of the new hearing is not always advantageous to the company. 298 OCTOBER TERM, 1922. Opinion of Brandeis and Holmes, JJ. 262U.S. only fails to furnish any applicable standard of judgment, but directs consideration of so many elements, that almost any result may be justified. The adoption of present value of the utility’s property, as the rate base, was urged in 1893, on behalf of the community; and it was adopted by the courts, largely, as a protection against inflated claims based on what were then deemed inflated prices of the past. See argument in Smyth v. Ames, 169 U. S. 466, 479,. 480; San Diego Land & Town Co. v. National City, 174 U. S. 739, 757, 758; San Diego Land & Town Co. n. Jasper, 189 U. S. 439, 442, 443; Stanislaus County n. San Joaquin & Kings River Canal & Irrigation Co., 192 U. S. 201, 214. Reproduction cost, as the measure, or as evidence, of present value was, also, pressed then by representatives of the public who sought to justify legislative reductions of railroad rates.9 The long depression which followed the panic of 1893 had brought prices to the lowest level reached in the Nineteenth Century. Insistence upon reproduction cost was the shippers’ protest against burdens believed to have resulted from watered stocks, reckless financing, and unconscionable construction contracts. Those were the days before state legislation prohibited the issue of public utility securities without authorization from state officials; before accounting was prescribed and supervised; when outstanding bonds and stocks were hardly an indication of the amount of capital embarked in the enterprise; when depreciation accounts were unknown; and when book values, or property accounts, furnished no trustworthy evidence either of cost or of real value. Estimates of reproduction cost were then offered, largely as a means, either of supplying lacks in the proof of actual cost and investment, or of testing 8See Steenerson v. Great Northern Ry. Co., 69 Minn. 353, 374; San Diego Water Co. v. San Diego, 118 Cal. 556, 568; Metropolitan Trust Co. v. Houston & Texas Central R. R. Co., 90 Fed. 683, 687, 688. S. W. TEL. CO. v. PUB. SERV. COMM. 299 276 Opinion of Brandeis and Holmes, J J. the credibility of evidence adduced, or of showing that the cost of installation had been wasteful. For these purposes evidence of the cost of reproduction is obviously appropriate. At first reproduction cost was welcomed by commissions as evidence of present value. Perhaps it was because the estimates then indicated values lower than the actual cost of installation. For, even after the price level had begun to rise, improved machinery and new devices tended for some years to reduce construction costs.10 Evidence of reproduction costs was certainly welcomed, because it seemed to offer a reliable means for performing the difficult task of fixing, in obedience to Smyth v. Ames, the value of a new species of property to which the old tests—selling price or net earnings— were not applicable. The engineer spoke in figures—a language implying certitude. His estimates seemed to be free of the infirmities which had stamped as untrustworthy the opinion evidence of experts common in condemnation cases. Thus, for some time, replacement cost, on the basis of prices prevailing at the date of the valuation, was often adopted by state commissions as the standard for fixing the rate base. But gradually it came to be realized that the definiteness of the engineer’s calculations was delusive; that they rested upon shifting theories; and that their estimates varied so widely as to intensify, rather than to allay doubts.11 When the price 10 Compare Mr. Justice Field in Railroad Commission Cases, 116 U. S. 307, 343, 344; Steenerson v. Great Northern Ry. Co., 69 Minn. 353, 374. “Thus in Re Marin Municipal Water District (Cal.) P. U. R. 1915 C, 433, 452, the several valuations of five experts were: $670,163; $723,001.85; $763,028; $919,204; $1,031,436. In Springfield v. Springfield Gas & Electric Co. (Ill.), P. U. R. 1916 C, 281, 307, the several valuations of five experts were $547,488; $588,262; $806,404; $898,785; $940,988. In Duluth Street Ry. Co. v. Railroad Commission (Wis.), P. U. R. 1915 D, 211, the valuations of two experts, both employed by the State were $600,000 and $1,100,000. 300 OCTOBER TERM, 1922. Opinion of Brandeis and Holmes, JJ. 262U.S. levels had risen largely, and estimates of replacement cost indicated values much greater than the actual cost of installation, many commissions refused to consider valuable what one declared to be assumptions based on things that never happened and estimates requiring the projection of the engineer’s imagination into the future and methods of construction and installation that have never been and never will be adopted by sane men.12 Finally, the great fluctuation in price levels incident to the World War led to the transfusion of the engineer’s estimate of cost with the economist’s prophecies concerning the future price plateaus. Then, the view that these estimates were not to be trusted as evidence of present 1215 Mich. Law Rev. 205, 216; Re Grafton County Electric Light & Power Co. (N. H.), P. U. R. 1916 E, 879, 885-888. Compare Appleton Water Works Co. v. Railroad Commission, 154 Wis. 121, 154, quoting: “ Skilled witnesses come with such prejudice in their minds that hardly any weight should be given to their evidence.” In Re Michigan State Telephone Co. (Mich.) P. U. R. 1921C, pp. 545, 554, 555, the Commission said: “ This method [reproduction at prices prevailing at time of valuation] of determining value usually included percentages for engineering services never rendered, hypothetical efficiency of unknown labor, conjectural depreciation, opinion as to the condition of property, the supposed action of the elements; and, of course, its correctness depends upon whether superintendence was or would be wise or foolish; the investment improvident or frugal. It is based upon prophecy instead of reality, and depends so much upon half truths that it bears only a remote resemblance to fact, and rises at best, only to the plane of a dignified guess.” See also Danbury v. Danbury & Bethel Gas & Electric Light Co., P. U. R. 1921 D, 193, 206 (Conn.). In Public Service Commission v. Pacific Telephone & Telegraph Co., P. U. R. 1916 D, 947, 955, the Commission said: “The old methods have proven uncertain, indefinite, and unsatisfactory to honest utilities and commissions alike.” See also In re Northampton Gas Petition (Mass.), P. U. R. 1915 A, 618, 626; Public Service Commission v. Pacific Telephone & Telegraph Co., P. U. R. 1916 D, 947, 955. S. W. TEL. CO. V. PUB. SERV. COMM. 301 276 Opinion of Brandeis and Holmes, JJ. value, was frequently expressed. And state utility commissions, while admitting the evidence in obedience to Smyth n. Ames, failed, in ever-increasing numbers, to pay heed to it in fixing the rate base.13 The conviction is wide-spread that a sound conclusion as to the actual value of a utility is not to be reached by a meticulous study of conflicting estimates of the cost of reproducing new the congeries of old machinery and equipment, called the plant, and thev still more fanciful estimates concerning the value of the intangible elements of an established business.14 Many commissions, like that of Massachusetts, have declared recently that “ capital honestly and 13 Their action is in accord with views commonly held by legal writers. Compare Edwin C. Goddard, “ Public Utility Valuation,” 15 Mich. Law Rev. 205; Robert L. Hale, “The ‘Physical Value’ Fallacy in Rate Cases,” 30 Yale Law Journal, 710; Donald R. Rich-berg, “A Permanent Basis for Rate Regulation,” 31 Yale Law Journal, 263; Robert H. Whitten, “Fair Value for Rate Purposes,” 27 Harv. Law Rev. 419; Henry W. Edgerton, “Value of the Service as a Factor in Rate Making,” 32 Harv. Law Rev. 516; Gerard C. Henderson, “ Railway Valuation and the Courts,” 33 Harv. Law Rev. 902, 1031; Armistead M. Dobie, “Judicial Review of Administrative Action in Virginia,” 8 Va. I.aw Rev. 477, 504. See also 32 Yale Law Journal, 390, 393; 19 Mich. Law Rev. 849. 14 The Public Utility Reports for 1920, 1921, 1922 and 1923 (to March 1) contain 363 cases in which the rate-base or value was passed upon. Reproduction cost at unit prices prevailing at the date of valuation appears to have been the predominant element in fixing the rate base in only 5. In 63 the commission severely criticised, or expressly repudiated, this measure of value. In nearly all of the 363 cases, except 5, the commission either refused to pay heed to this factor as the measure of value, or indeed as evidence of any great weight. The following summary shows the predominant element in fixing the rate base in the several cases: In 5 cases: Reproduction cost at unit prices prevailing at the date of the valuation. In 28 cases: Reproduction cost at unit prices prevailing at some date, or the averages of some period, prior to the date of the valuation. 302 OCTOBER TERM, 1922. Opinion of Brandeis and Holmes, JJ. 262U.S. prudently invested must, under normal conditions, be taken as the controlling factor in fixing the basis for computing fair and reasonable rates.” 16 To require that reproduction cost at the date of the rate hearing be given weight in fixing the rate base, may subject investors to heavy losses when the high war and post-war price levels pass—and the price trend is again In 12 cases: Reproduction cost at unit prices prevailing at some date not specifically stated. In 22 cases: Reproduction cost of an inventory of a prior date at prices prevailing at that date or prior thereto, plus subsequent additions at actual cost (so-called split inventory method). In 3 cases: Reproduction cost on basis of future predicted prices (so-called trend prices, or new plateau method). In 102 cases: A prior valuation by the commission plus the actual cost of subsequent additions. In 85 cases: The actual original cost (including both initial cost and additions). In 6 cases: Original cost arbitrarily appreciated. In 27 cases: The historical cost or prudent investment. In 28 cases: Book cost or investment. In 12 cases: Bond and stock capitalization. In 36 cases: Determination and classification of method impossible. ™ Middlesex and Boston Rate Case, Public Service Commission (Mass.), October 28, 1914, report, pp. 7-14; Bay State Rate Case, P. U. R. 1916 F, 221, 233. And see ibid for a quotation from an address delivered at the “ Conference on Valuation ” in Philadelphia, November, 1915, in which the late John M. Eshleman, first president of the California Railroad Commission, said: “If we had this problem at the beginning and were not attacking it in the middle, we would have no difficulty in agreeing with the holder of capital upon this subject, for he would quite readily agree to take the cost of doing the business plus an earning upon the mopey actually invested comparable to the earning offered in other available investments. Therefore, the cost of doing the business, plus a return upon the capital necessarily invested in the business, which return shall be as great as is offered in other businesses of similar hazard, is all that ought to be accorded for the future, and it is all that will be accorded if the public has any business sense. And if more is asked by the S. W. TEL. CO. v. PUB. SERV. COMM. 303 276 Opinion of Brandeis and Holmes, JJ. downward.16 The aggregate of the investments which have already been made at high costs since 1914, and of those which will be made before prices and costs can fall heavily, may soon exceed by far the depreciated value of all the public utility investments made theretofore at relatively low cost. For it must be borne in mind that depreciation is an annual charge. That accrued on plants constructed in the long years prior to 1914 is much larger than that private owner, then he may expect no sympathy when he finds the public his competitor and his earning power impaired.” No case involving the fixing of rates by a commission has ever come t