While nobody is inclined today to question the right of the State and nation to supervise or control our great transportation systems, in the interest of public welfare and general well-being, very many thinking citizens are now asking themselves and others if our regulation of railroads is right. In other words, would a single system of Federal control over all railroads be better adapted to our purposes than the present multiform system of FederalState control, under which the railroads are subjected to the rule of 49 superiors?

It is so difficult to draw the line between interstate and intrastate commerce, speaking in a comprehensive sense, of all our railways and their tonnage, the distinction today seems to be more artificial than real. Matters that were purely the subject of State jurisdiction in 1787 are unquestionably interstate in character today; and this being the case with so preponderatingly large a proportion of our aggregate commerce, it may well be questioned if what is substantially a fiction should be longer observed and tend to increase the number of railroad rulers from 1 to 49.

Analogy Between Banking and Transportation Seemingly, there is an analogy between banking and the business of transportation. Banks supply the money or credit necessary for productive enterprise, for industrial reward and for all sorts of development work dependent upon human effort. Railroads find markets for the results of this enterprise and effort, and without their assistance all industry would be paralyzed and all commerce prostrated. Both banking and transportation are accordingly indispensable to business; and if the Federal Government may convert what was a chaotic, unco-ordinated and undisciplined aggregation of independent units into a completely co-ordinated, harmonious and serviceable banking system, under exclusive Federal jurisdiction, there should be some warrant for the assertion of similar Federal control over railroads-viewing this question from a purely expedient or utilitarian point of view.

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Railway Service Impaired by Dual Supervision

Regulation or control of railroads is supposed to be exercised in the public interest to the end that adequate and efficient transportation facilities be furnished at reasonable rates. When regulation accomplishes these ends it is fair, just and satisfactory. When for any reason it fails to provide for one or for all these essentials it invites inquiry and explanation. On every hand today we hear reports of car shortages, of freight congestion, of delayed shipments and of the powerlessness on the part of the railroads to grapple with these matters. Hence, it is inferable that adequate and efficient transportation facilities are not being furnished in the present by the railroads, and our 49 railroad masters must explain why. Theirs is the responsibility and theirs the logical explanation.

If they cannot justify their stewardship over the railroads and show that their rule has been wise and just, giving the railroads every latitude necessary to attract capital to their enterprise to provide the continuous development and expansion work required by our daily increasing commerce, then, the conclusion must inevitably follow that the policy of the 49 is in need of vital amendment.

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How Railroad Credit Has Been Injured Common sense tells us that we cannot spend more than we possess, and the railroads, as a whole, have shown us why they have not spent more money for improvements and extensions in recent years. They did not earn the money and could not obtain it from the public. rowings by them have been exceedingly costly and increasingly difficult, because both their earning ability and their credit have been greatly doubted. This doubt has not arisen because of anything that the railroads have done, but rather because of what has been done to them through the exactions of 48 State rulers and one Federal supervisor. Their earnings have been reduced through increased taxation, heavy capital expenditures, increased cost of operation and substantial reductions

in rates by numerous States. As a result of these happenings, railroad credit has been seriously impaired, leading to a consequent disfavor toward these securities in the minds of investors.

Costly Regulations and Requirements Between rate reductions and attempted regulation of railroad operation by our several States, the railroads have sustained losses aggregating many millions of dollars annually. The so-called "full-crew" law is an illustration in point. That enactment cost the Pennsylvania Railroad almost $2,000,000 a year in the States of New York, Pennsylvania and New Jersey alone; and all State laws regulating operation cost that road more than $4,000,000 annually, or the equivalent of a 5 per cent. return on $80,000,000 of capital investment. All told, the sum paid out by 166 railroads in 1914 for operating expenses imposed by State legislation amounted to $28,000,000, or the equivalent of a 5 per cent. dividend on $574,000,000.

In the year mentioned, railroad earnings declined $120,000,000, and exhibits of this character are not calculated to increase investment enthusiasm or confidence. Indeed, whereas industrial securities ranked far below railroad offerings in popular esteem some years ago, that has not been the case for approximately two years, and the positions of these classes in that period have been reversed.

Supervision of Railroad Security Issues Another circumstance affecting railroad securities adversely and also one which has contributed to the impairment of railroad credit is the control or supervision of all railroad security issues asserted and exercised by 19 States. Numerous investors have viewed this development of State railroad rule with grave alarm, and, after perceiving some of its unfavorable results, decline altogether to invest in railroad securities.

They saw the Arizona Railroad Commission, by its dilatory tactics, indirectly cause the Southern Pacific to suffer a loss of $275,000. They saw the Kansas Commission insisting upon the expenditure of certain sums in Kansas as the price of its consent to an intended offering; and they saw other States follow suit. They saw a carefully prepared financial plan for the issuance of new railroad securities, just before the European War began, defeated by the dilatory tactics of several State commissions, whose consent or approval was necessary. With these experiences before them, investors naturally refuse to put their money in enterprises subject to the arbitrary and discriminating authority of so many outsiders and not directed by the experience, wisdom and

judgment of managers fully conversant with the situation and responsible for its solution. Present System Breeds Expensive Litigation

Apart from its costliness, regulation by 48 State authorities and one Federal supervisor leads to friction, litigation, discrimination and waste. Under this rule, nothing is certain but uncertainty, and conflicts must be expected as a natural result. Each State naturally views its work of regulation as a matter of exclusive self-interest. In the case of a railroad, such as the Santa Fe, which traverses 13 separate State jurisdictions, one can well imagine the difficulties that beset its managers in attempting to comply with the multifarious enactments of these 13 States.

If there be any truth in the saying that no man can serve two masters, surely making our railroads serve 49, with no approach to uniformity or co-ordination, must be regarded as logically and fundamentally unwise. Apparently, the only remedy for such a complicated system of railroad control is to turn back to the Constitution and enforce, on behalf of the nation, the power therein committed to Congress to regulate commerce among the States. If we do this, we can end State rule and evolve from the present chaos a unified Federal railroad system.

To Revise the Western Method of
Purchasing Drafts

The Spokane & Eastern Trust Company of Spokane, Wash., has taken the initiative in a commendable movement to revise the practice which is adhered to by many banks of the W'est in regard to the purchase of drafts. It is intended to make the requirements conform to those which prevail among banks in the East. Probably 90 per cent. of Western purchases of drafts on Eastern banks are made payable to the party to whom the money is to be forwarded. Experience has demonstrated that this policy results in delay and is contrary to approved banking practice. The proper procedure, it is claimed, is for the buyer to have the draft made payable to himself, while he in turn endorses it in favor of the person or persons to whom the money is being sent. By following this course the paying bank enabled to immediately recognize the purchaser of the draft and thus expedites the handling of such items.

VIRGINIA: RICHMOND. The American Trust Company has been organized with a capital of $100,000. Oliver J. Sands, president, and Otis P. Walker, secretary. Mr. Sands is president of the American National Bank.

AUTHORITY OF OFFICER TO EXECUTE
CORPORATE NOTE

Trust companies are vitally interested in requirements of proof as to an officer's authority to execute notes in behalf of a corporate borrower. Failure to secure adequate assurances in this respect may result in serious losses. A recent decision by the Appellate Division, Second Department, of New York in Westchester Mortgage Company vs. Thomas B. McIntire, Inc. (171 N. Y. App. Div. 518, 157 N. Y. Supp. 725), is a forcible example in point. Here a suit on a corporate note is sent back for a new trial because, among other things, there is no proof in the record of the authority of its president to make and deliver the note. The Court says: "That an officer of a corporation cannot generally bind the corporation on a promissory note, without special authority arising either from specific resolutions of the directors or from the by-laws of the corporation." There is an exception to this rule, however, when the note is under the corporate seal. If such seal is attached there is a prima facie presumption of authority in the president to execute the note. (Quackenboss vs. Globe & R. F. Ins. Co., 177 N. Y. 71, 69 N. E. 223; United Surety Co. vs. Meenan, 211 N. Y. 39, 105 N. E. 106.)

The rule that the president's authority will not ordinarily be presumed, as thus announced in New York, is not universally adopted. In fact the conflict on this point in the several States is irreconcilable. Arrayed on the other side and in marked contrast is the late opinion of the Mississippi Supreme Court in Moyse Real Estate Company vs. First National Bank of Commerce (70 So. 821). They told that proof by the plaintiff that a president executed a note in behalf of a corporation is prima facie evidence of his authority to bind the corporation in that manner. Appreciation of

modern conditions with respect to corporations and business needs is thus ably expressed:

"Nearly all the big business and a large part of the small business is now conducted by corporations, and if it be the law that persons dealing with the president of a corporation about matters of business clearly within the powers of the corporation to transact must deal at arm's length, and demand that the president exhibit his credentials before entering into contracts with him, it seems to us that not only the corporation, but also those dealing with corporations, will be seriously hampered. It is not proposed to hold that a president of a corporation has the inherent power to bind the corporation; but we do hold that the fact that the president of a corporation has executed a contract for his corporation is prima facie evidence that the president had the authority to bind the corporation. If it be true that the president did not possess the authority assumed by him in the present case, the proof of his lack of authority was in the possession of the corporation, and there would have been no difficulty in the way of its production. On the other hand it might be very difficult and expensive for the plaintiff to have secured the evidence to show his authority."

FRICTION WITH PERSONAL TRUSTEE

The advantage of the corporate over the individual trustee with respect to avoiding friction and family disputes comes forcibly to mind upon an examination of the recent opinion of the Supreme Court of Tennessee in Maydell vs. Maydell (185 S. W. 712).

It appears that James Maydell died in Memphis in 1892, the owner of a considerable estate. Two-ninths of this estate was devised in trust to his wife, Mrs. Sophie Maydell, for the benefit of his daughter, Mrs. Lizzie Hunter.

The mother acted as trustee from the death of her husband, but a deep seated feeling of animosity grew up between the mother and daughter, eventually involving litigation over the management and culminating in a suit for removal of the mother as trustee. The Chancellor ruled that Mrs. Maydell was a suitable person to manage the trust and declined to remove her, but the Supreme Court reversed this holding, and ordered that she be removed. In the course of its opinion, the Court

says:

"We do not undertake to fix the blame for the state of feeling between the mother and daughter, nor do we regard the responsibility for this condition to be of special importance in disposing of the question before us. Under the terms of James Maydell's will the trustee for his daughter is directed to apply the income from the daughter's share of the estate to the best interests of the latter and for her comfort, maintenance, and support.

"To properly discharge such duties the trustee should be on friendly terms with the beneficiary. The trustee should have the confidence of the beneficiary so as to know the needs of the latter to appreciate what expenditures should be made for her comfort, maintenance, and support of the latter. Moreover, the trustee should be favorably disposed to the beneficiary so that the discretion of the trustee may te employed for the best interests of the beneficiary. Such a personal trust cannot be satisfactorily administered where the relations between the parties are hostile. Unless a

new trustee is appointed the antagonism between mother and daughter will result in wasting the estate in litigation; if we are to judge by the conduct of these parties in the past." (Italics supplied.)

The case of May vs. May (167 U. S. 310), was an earlier instance of much the same kind. There the United States Supreme Court said:

"The power of a court of equity to remove a trustee, and to substitute another in his place, is incidental to its paramount duty to see that trusts are properly executed; and may properly be exercised whenever such a state of mutual ill-feeling, growing out of his behavior, exists between the trustees *** in question and the beneficiaries, that his continuance in office would be detrimental to the execution of the trust, even if for no other reason than that human infirmity would prevent the co-trustee or the beneficiaries from working in harmony with him, and although charges of misconduct against him are either not made out, or are greatly exaggerated."

TESTAMENTARY PROVISION TO PREVENT MARRIAGE WITH DESIGNATED PERSON That conditions in wills in general restraint of marriage are contrary to public policy and void, is familiar law. But how about a condition in restraint of marriage with a particular person? Is this also void? The New York Court of Appeals says that it is not. (Matter of Seaman, 218 N. Y. 77.)

The report of this case discloses that Egbert B. Seaman, who died in June, 1914, devised and bequeathed his entire estate to his executors and trustees to pay the net income to his wife during her life. Upon the death of his wife or upon his own death, in case she died first, he directed his executors and trustees to divide the principal of his estate into three equal shares, one of which he devised and bequeathed to his son, Egbert B. Seaman, Jr., absolutely; the second share to his daughter, Carrie L. Eidlitz, absolutely; and the third share to his daughter, Frances P. Oakley, widow of John B. H. Oakley, absolutely, "provided, however, that at the time of my decease my said daughter, Frances P. Oakley, shall be married to some person other than one Leo Fassler, who now resides in the city of New York and is there engaged in the practice of law, or provided that at the time of my death the said Leo Fassler is dead."

The will then provides that in the event that she is unmarried at the time of the testator's death and Leo Fassler is then living or she is married to him, trustees shall retain her share in trust and pay over the net income to her. It then states that: "Should my said daughter, Frances P. Oakley, marry the said Leo Fassler, then upon her death, either with or without issue, her surviving and leaving the said Leo Fassler her surviving, I hereby give, devise and bequeath the portion of my estate, held in trust for my daughter, Frances P. Oakley, and direct my trustees to pay over and distribute the principal thereof, in equal shares, to my son, Egbert B. Seaman, Jr., and to my daughter, Carrie L. Eidlitz. *** In the event that my said daughter, Frances P. Oakley, should marry the aforesaid Leo Fassler, and should survive him as his widow, then upon his death, leaving her surviving, I give, devise and bequeath and direct my trustees to pay over and deliver to my said daughter, Frances P. Oakley, the principal of the trust. In the event that she "remains unmarried and survives him, then upon the death of the aforesaid Leo Fassler, leaving her unmarried and surviving, I direct and empower my trustees to pay over and deliver to my said daughter, Frances P. Oakley, the principal of the trust created for her benefit."

Upon probate it was contended on behalf of Mr. Leo Fassler that the will was invalid and illegal "as being equivalent to putting a price on the head of a person and offering an inducement for the termination of his life." It was further contended that the particular conditions directed against him are contrary to public policy and therefore void. As to the first point the Court of Appeals says that it is not to be assumed for a moment that it was the intention of Mr. Seaman to incite his daughter to bring about the death of Mr. Fassler. "It might just as well be presumed in every case of a devise for life to one person with a remainder over to another, that the remainderman would be thereby induced to compass the death of the life tenant. This would wholly disregard the legal presumption that men do not commit criminal offenses." With respect to the alleged invalidity of the provisions in restraint of marriage the Court states that conditions in restraint of marriage with particular classes or specific persons have the sanction of sound judicial authority.

Thus in Graydon's Executors vs. Graydon (23 N. J. Eq. 229), a condition imposed upon a bequest to a son that it should be void if within a stated time he should marry a daughter of a person named in the will, was upheld. The chancellor in that case said: "It is the duty of the courts to favor this or any other legal means which a father may adopt to enforce the authority which the law, for wise purposes, has given to him over his minor children, and that regard for his wishes and counsel in the more important concerns of their lives after maturity, which the untrammeled testamentary power conferred by our law is calculated to secure."

A LUSITANIA WILL CASE-DEATH IN COMMON DISASTER

Before embarking on the last voyage of the Lusitania, Mr. and Mrs. Charles Frederick Fowles called at the office of counsel and had their respective wills prepared and executed. In the will of Mr. Fowles there was inserted the following provision:

"In the event that my said wife and myself should die simultaneously or under such circumstances as to render it impossible or difficult to determine who pre-deceased the other, I hereby declare it to be my will that I shall have pre-deceased my said wife, and that this my will and any and all its provisions shall be construed on the assumption and basis that I shall have pre-deceased my said wife."

Both Mr. and Mrs. Fowles went down with the Lusitania on May 7, 1915. In proceedings to construe Mr. Fowles' will, no evidence was offered as to which of the two died first. The

common law rule, the one in effect in New York, is that in the absence of all proof of actual survivorship there is no presumption of survivorship among those who perish in a common disaster. In some States there is a presumption of simultaneous death. But the question of what, if any effect, should be given to such a clause as that in Mr. Fowles' will appears to be presented to the courts for the first time.

Surrogate Fowler holds that as a direction to the Court as to what its construction of the will should be, it is void. He says that: "Presumptions prescribed by the common law and rules of construction based thereon are fixed and immutable, and cannot be thus directed to be altered by the Court to meet particular cases."

But as a direction of substitution, that is, as an expression of intention that his wife's `personal representatives should take in case of her death, the clause is given practical effect. In the words of the Surrogate: "It is to me obvious that Mr. Fowles' real intention by the ninth clause of his will was to prevent a lapse in the event of Mrs. Fowles' incapacity in any way to take under his will. In that event Mr. Fowles intended that there should be a substitution of some one else in her place.

There is nothing contrary to any rule of law in this intention. Shifting uses and executory limitations, freely allowed at common law, were largely matters of substitution.

Whenever there is in law an intention to substitute another in the place of a legatee or devisee dying during the lifetime of a testator, or at the same time as testator, or immediately after testator, so as to be unable to take and hold, then that other named as substitute will take by substitution, if vesting is concurrent and there is no perpetuity." As a result of this view it is decreed that Mrs. Fowles' executors take the property under her husband's will for the purposes prescribed by her will. (In re Towles' Will, 158 N. Y. Supp. 456.)

CERTIFIED CHECKS

A bank in certifying a check in the usual form does no more than to affirm the genuineness of the signature of the drawer, and that he has funds on deposit to meet it, and that the funds will not be permitted to be withdrawn to the prejudice of the holder of the check. It does not thereby represent that a check is genuine in all respects. So where a bank has certified a raised check and has paid the amount as raised, it is entitled upon discovery of the forgery to recover the payment. The form of action is for money paid under a mistake of fact. (National Reserve Bank vs. Corn Exchange Bank, 157 N. Y. Supp. 316.)