can take the proposal to the top committee in the West, known as the Western traffic executive committee; and, also, any carrier involved in the Western agreement could take the matter from this highest Western committee to the Western Commissioner. And the matter could still be taken to WARE.

Before a proposal is taken to the Western traffic executive committee it may first go to a conference committee which is composed of four (now three) delegations one from each of the principal rate bureau territories in the West. Each of these delegations is headed by the chairman of its bureau, a paid bureau employee; and each of these delegations comprising a complete representation of all Western area, may vote on each proposal before the conference committee whether the rate proposal affects its territory or its members or not. These delegations caucus on each proposal and vote under the unit rule-one vote per delegation. It takes all votes to change or initiate a rate. In the caucus, it takes a majority vote to control the delegation's unit vote. They all vote in the caucus whether interested in the matter or not.

One negative vote, out of all the votes in the conference committee, places the matter before the top committee in the West; namely, the Western traffic executive committee, above which is nothing in the West except WARE, and until recently the Western Commissioner and the committee of directors.

In the top committee, known as the Western traffic executive committee, there is no quorum unless two-thirds or more of the mileage is present; and, in the absence of a quorum, the proposal is on dead center. Four large Western roads can break a quorum.

At this point it should be remembered that it is possible that the make-up of a quorum could be present in Chicago at all times; but the further possibility exists at all times that on some proposals a quorum might act; but that on other proposals one-third or more of the mileage would or could withdraw. This situation is important in view of the fact that there appears to be no sergeant at arms with power to bring the absentees back into the meeting for the purpose of acquiring a quorum.

But, assuming a quorum and assuming a bona fide consideration and vote in the Western traffic executive committee, let us consider the following:

(1) This committee is composed of vice presidents from several Western territories, all with the power to vote on all proposals whether they involve their territories or not.

(2) The vice presidents from the territories directly involved have in most cases already considered the matter and voted on it in their own local territories. However, passing by all of that and assuming the matter is approved by the top committee, known as the Western traffic executive committee, still the chairman of that committee could take the matter to the Western Commissioner. Moreover, if all members in this top committee approve a proposal and if the chairman approves of it, still any carrier involved in the Western Agreement could take the matter to the Western Commissioner. The matter can still be taken to WARE.

Assuming that, so far as the West is concerned, the proposal has hurdled all of the obstacles in this extraordinarily geared and complicated hierarchy, it still may go to the Association of American Railroads were the South or the North is affected and where they object. Where there is no such objection the AAR may take the matter over on its own initiative.

This is the record. And while all of this goes on nothing is filed with the Interstate Commerce Commission. The railroads explain this process in their pleadings in the Georgia case in the following words:

** * * The processes of 'appeal,' by which is meant reference to other rate conferences generally composed of traffic officers of higher rank, have the purpose of securing the further and, if possible, more mature consideration of proposals, generally by persons of higher official rank or greater experience, or enjoying a broader contact with the proposal under consideration."

This character of process is further described by the railroads' pleadings in the Georgia case as

* * *

"means and methods of investigation, consultation, and consideration between and among carriers and shippers which have been employed for nearly half a century for the purpose of ascertaining the rates that will meet the standards laid down in the Interstate Commerce Act and will best serve the public interest.

But we respectfully call attention to the fact that the parties were under no illusions as to the legal effect of their activities under the Western Agreement as is shown by various admissions.

On April 27, 1938, President Bledsoe, of the Santa Fe, wrote the Western Commissioner that in the proceedings involved in the Commissioner's file No. 26049, there was a violation of both California and Federal antitrust laws.

And, on July 17, 1936, George T. Atkins, of the Texas Katy, wrote the Commissioner, withdrawing a proposal to establish a reduced excursion fare from Katy points to Galveston and Houston because of a protest, saying: "As I thought, initiative to create business seems to have been taken away.'

Again, in 1940, the Commissioner took up the revised classification question involving classification ratings between points in the South and interterritorially between Official and Western Trunk Line Territories, on the one hand, and Southern Territory, on the other. He turned the problem back to Mr. Farmer, chairman of the WTEC, who supervised the Western lines while they worked it out. In this case there is probably presented some evidence in which the South and West are interested. This evidence is that Paul P. Hastings, of the Santa Fe, on March 26, 1940, wrote that

Under

"The new classification is a farce. We know this was the result of instructions given the official classification committee's representative on the classification simplification committee by the two or three powerful Eastern lines. instructions to maintain uniformity the Southern and Western representatives on that committee could make no material changes without concurrence of the Eastern representatives."

On the question as to whether the activities of the bureaus are toward abiding by standards of the Interstate Commerce Act as pleaded, we remind the committee of the following:

Tending to show that the activities of the Western railroads were independent of any statute, the letter of Paul P. Hastings, of the Santa Fe, dated November 26, 1940, addressed to the Commissioner and others, states:

"No competent traffic officer reduces rates voluntarily unless convinced reductions will result in more net revenue in future, either by development of new traffic, recapturing traffic lost to other forms of transportation, or retaining traffic we now have. Unfortunately, under present conditions the latter is often the most important."

Tending further to show that the activities of the committee of directors were wholly independent of any statute the following excerpts from the minutes of that committee are now shown:

"(a) Whereas the committee of directors have given full consideration to the action of the Chicago & North Western Railway in establishing transit at Omaha on grain for export, and to the objections of various lines to the Commissioner's ruling: Therefore, be it

"Resolved, That the Commissioner be requested to convey to the Western executives their concern over the extension of transit privileges to Omaha and Council Bluffs which were first accorded at Kansas City in 1935, and the possibility of a further extension of such privileges, and request the executives to review these transit privileges in an effort to find a way to correct the situation. (Minutes of meeting of September 14, 1938, 40 Wall Street, New York, at which the following persons were present: Committeemen, E. N. Brown, F. W. Doolittle, Gen. James G. Harbord, W. Averill Harriman, F. W. Charske, John H. W. Ingersoll, Stephen Birch, J. S. Pyeatt, Francis F. Randolph, and H. W. Rush, as well as F. M. Wilson, Assistant to the Western Commissioner.)

"(b) In connection with bus and truck operations by subsidiaries of the Western lines, the following appears:

"Resolved, That it is the sense of the meeting that suitable steps be taken by the chief executives of carriers signatory to the Commissioner agreement to include within the spirit of the agreement all transportation operations conducted by the parties thereto, any controversies arising thereunder to be handled under the provisions of the agreement. (See minutes of meeting of July 8, 1936, 40 Wall Street, New York, with the following persons present: Committeemen Stephen Baker, Allen P. Green, Gen. James G. Harbord, W. Averill Harriman, C. Jared Ingersoll, Francis F. Randolph, H. W. Rush, and Walter W. Colpitts, as well as the Western Commissioner, H. G. Taylor.)"

"(c) Resolved, That without passing on the merits of the particular case under consideration, the directors' committee express the view that in the interest of Western railroads as a whole, there should be no bidding for traffic on a rate basis. [Minutes of meeting on October 13, 1938, with the following persons present: Committeemen Stephen Baker, F. W. Doolittle, Allen P. Green, General James G. Harbord, R. E. Harding, W. Averill Harriman, C. Jared Ingersoll, Stephen

Birch, Francis F. Randolph, H. W. Rush, and Sir William Wiseman, as well as F. M. Wilson, assistant to the Western Commissioner.]

The committeemen in their minutes also went on record that:

* ** passenger fares in a given territory should not be reduced without the consent of the strong passenger carrying road in that territory because such road was the one most seriously affected by such reductions." [Minutes of meeting of committee of directors on October 13, 1938.]

With the foregoing description, illustration, and comment in mind, the question should arise as to what overt acts were actually carried out through the mechanisms in question. We have some 81 of such acts readily available which are shown on exhibit DofJK-3, now introduced.

A description of, and comment upon the organization and power of the Association of American Railroads is now introduced as exhibit DofJ K-4.

(EXHIBIT DOFJK-1)

MEMBERS OF COMMITTEE OF DIRECTORS UNDER AGREEMENT FOR COMMISSIONER PLAN, WITH AFFILIATIONS

Stephen Baker:

Bank of The Manhattan Co., 40 Wall Street, New York City, chairman of board and director;

Bowery Savings Bank, New York City, trustee;
Great Northern Railway, director.

Donald C. Bromfield:

Garrett-Bromfield & Co., president and director;
Denver & Salt Lake Railway, secretary and director;
Arizona Marble Co., president and director;

Denver Pressed Brick Co., vice president and director.
E. N. Brown:

St. Louis-San Francisco Railway Co., chairman of board, chairman executive committee, and director;

Chicago, Rock Island & Pacific Railway Co., chairman of board and president. A. L. Burford:

Texarkana National Bank, director;

Magnolia Ice & Coca-Cola Bottling Co., Texarkana, Ark., secretary and director;

Louisiana & Arkansas Railway, general counsel;

Texarkana & Fort Smith Railway, director;

Port Arthur Canal & Dry Dock Co., director;

4 States Grocery Co., Texarkana, Ark., director.

C. W. Cahoon, Jr.:

Olney Oil & Refining Co., City National Bank Building, Wichita Falls, Tex., president, treasurer, general manager, and director;

United Oil Corp., Wichita Falls, Tex., president and director.

William F. Carey:

Carey, Baxter & Kennedy, Inc., New York City, president and Director; International Utilities Corp., chairman of board, and director;

Curtiss-Wright Corp., director;

Dominion Gas & Electric Co., of Canada, director;

Southern Phosphate Corp., chairman of board;

Siems-Carey Railway & Canal Co., president and director;

Chicago Great Western Railroad, director;

The China Corp., vice president;

Lehigh Coal & Navigation Co., director.

F. W. Doolittle:

North American Co., director;

Potomac Electric Power Co., director;

Illinois Terminal Railroad, director;

Capital Transit Co., director;

Washington Railway & Electric Co., director.

William M. Duncan:

Duncan Foundry & Machine Works, Inc., Alton, Ill., president and director; Illinois Stoker Co., president and director;

Litchfield & Madison Railway, vice president and director.

Allen P. Green:

A. P. Green Fire Brick Co., Mexico, Mo., president and director;
Mercantile Commerce Bank & Trust Co., St. Louis, director;

S. A. Materiales Refractarios, A. P. Green, Buenos Aires, Argentina, South America, president;

Liptak Furnace Arches, Ltd., London, England, chairman and director. Bigelow-Liptak Corp., vice president and director;

Ann Arbor Railroad, director;

Wabash Railway Co., director;

New Jersey, Indiana & Illinois Railroad, director.

James G. Harbord:

Bankers Trust Co., New York, director;

Radio Corp. of America, chairman of board and director;

National Broadcasting Co., director.

R. C. A. Communications, Inc., chairman of board and director;

R. C. A. Manufacturing Co., Inc., Camden, N. J., director;

R. C. A. Institutes, Inc., chairman of board of directors;

New York Life Insurance Co., member executive committee and director;
Marconi Telegraph-Cable Co., Inc. (New Jersey, New York), director;

Employers Liability Assurance Corp., Ltd., of London, England, member of executive committee;

Atchison, Topeka & Santa Fe Railway, member executive committee and director.

R. E. Harding:

Fort Worth National Bank, president and director;

State Reserve Life Insurance Co., director;

International-Great Northern Railroad, director;

Acme Brick Co., treasurer and director;

Texas Pacific Coal & Oil Co., director;

Texas Electric Service Co., director;
Missouri Pacific Rail Road, director;

New Orleans, Texas & Mexico Railroad, director;
Texas & Pacific Railway, director;

Fort Worth Belt Railway, director;

Agricultural Livestock Finance Corp., director;

Citizens Hotel Co., director;

Ellison Furniture & Carpet Co., director;

Forth Worth Lloyds, director.

W. A. Harriman:

Brown Bros., Harriman & Co., banking firm, 59 Wall Street, New York
City, partner;

Union Pacific Railroad, chairman of board;

Illinois Central Railroad, chairman executive committee and director;

Los Angeles & Salt Lake Railroad, chairman of board;

Oregon Short Line Railroad, chairman of board;

Oregon-Washington Railroad & Navigation Co., chairman of board;
Yazoo & Mississippi Valley Railroad, director.

Will H. Hays:

Motion Picture Producers & Distributors of America, Inc., president and director;

Chicago & Eastern Illinois Railway Co., director;

Continental Baking Co., director;

Hays & Hays, partner.

F. T. Heffelfinger:

F. H. Peavey & Co., Minneapolis, Minn., president and director;
Northwestern National Bank & Trust Co., of Minneapolis, director;
Farmers & Mechanics Savings Bank, director;

Northwestern National Life Insurance Co., director;

American Arch Co., director;

Lima Locomotive Works, director;

Minneapolis, St. Paul & Sault Ste. Marie Railway Co., director;

C. Jared Ingersoll:

Girard Trust Co., manager;

Western Saving Fund Society of Philadelphia, manager;

Mutual Assurance Co., director;

Midland Valley Railroad, chairman of board and director;

Kansas, Oklahoma & Gulf Railroad, chairman of board and dirctor;

Oklahoma City-Ada-Atoka Railway, chairman of board and director;
Muskogee Co., president and director;

Philadelphia & Western Railway, director;

64132-47-14

Garland Coal & Mining Co., president and director;
Pennsylvania Co., director;

Pittsburgh, Cincinnati, Chicago & St. Louis Railroad, director;
Pennsylvania Railroad, director;

Sebastian County Coal & Mining Co., president and director;
New Almaden Corp., director.

John H. W. Ingersoll (alternate to C. Jared Ingersoll):

Central-Penn National Bank, director;

Midland Valley Railroad, vice president and treasurer;

North Pennsylvania Railroad, director;

Oklahoma City-Ada-Otoka Railway, vice president, treasurer, and director;
Muskogee Co., vice president, treasurer, and director;

Kansas, Oklahoma & Gulf Railway, treasurer and director;

Sebastian County Coal & Mining Co., vice President and director.

B. F. Kauffman:

Bankers Trust Co., Des Moines, Iowa, president and director;

Equitable Life Insurance Co. of Iowa, director;

Northwestern Bell Telephone Co., director;

Bankers Building Corp., Des Moines, president and director;
F. W. Fitch Co., director;

Chicago & North Western Railway, director;

Chicago, St. Paul, Minneapolis & Omaha Railway, director.

Thomas W. Lamont (alternate to General Harbord):

J. P. Morgan & Co., Inc., chairman executive committee and vice chairman of board;

Lamont, Corliss & Co., chairman of board and director;

United States Steel Corp., director;

Southwestern Construction Co., director;

International Minerals & Chemical Corp., director;

Atchison, Topeka & Sante Fe Railway, director;
Sante Fe Pacific Rail Road, director.

William De Forest Manice:

Manice & Rives, 20 Exchange Place, New York City;

Federal Terra Cotta Co., secretary and director;

Federal Seaboard Terro Cotta Corp., director;

Laredef Holding Corp., secretary and director;

Phelps Dodge Corp., member executive committee and director;
Southern Pacific Co., director.

A. Perry Osborn:

Western Pacific Railroad Co., director:;

Denver & Rio Grande Western Railroad, director;
Denver & Salt Lake Western Railroad, director;

Rio Grande Junction Railway, director.

E. E. Pierce:

Chicago Board of Trade, member;
Winnepeg Grain Exchange, member;
Toronto Stock Exchange, member;
Boston Stock Exchange, member;
Chicago Mercantile Exchange, member;
Commodity Exchange, Inc., member;
New York Cotton Exchange, member;

Canadian Commodity Exchange, Inc., member;

New York Curb Exchange, member;

Dictaphone Corp., director;

Sperry Corp., director;

Ford Instrument Co., director;

Sperry Gyroscope Co., Inc., director;

Waterbury Tool Co., director;

Sperry Securities Corp., director;

Wickers, Inc., director;"

Chicago, Milwaukee, St. Paul & Pacific Railroad, director.

J. S. Pillsbury (alternate to F. T. Heffelfinger):

Pillsubry Flour Mills, Inc., cochairman of board of directors;
Northwestern National Bank & Trust Co., Minnesota, director;
Northwest Bancorporation, director;

Wayne Knitting Mills, director;

Munsingwear, Inc., director;