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been occurring throughout the entire world since war was declared in Europe in August, 1914, and almost daily history has been in the making since; but it may be said that it culminated in this historic resolution.

13. On April 24, 1917, the Congress passed the Act known as the Seven-Billion-Dollar-Bond Act. Under it the Secretary of the Treasury is authorized to issue five billions of bonds and two billions of Treasury certificates to carry on the war. He is authorized to lend, under certain conditions, to the foreign governments, allies of the United States in the war against Germany, the sum of three billions of dollars. The twelve Federal Reserve Banks throughout the country are appointed the fiscal agents of the Government to sell and distribute these bonds and they are at work at this writing making sale and distribution of the first two billions. Already the sum of seven hundred and forty-five millions has been loaned to Great Britain, France, Italy, Russia and Belgium.

14. On May 18, 1917, Congress passed the Act known as the Selective Conscription Act, and under it all male citizens between the ages of twenty-one and thirty, both inclusive, are required to register for military duty in ways provided for in the Act. Under this Act it is proposed to raise, organize and equip at once from among the male citizens of the United States within the age limits stated a force of five hundred thousand men to carry on the war with Germany. Under Section 4 the President is authorized, in his discretion and at such time as he may determine, to raise and begin the training of an additional force of five hundred thousand men. The President is authorized to utilize the services of any and all departments of the Government and of the several States in carrying this Act into execution, and it is made a misdemeanor not to register. The President has, by proclamation, fixed Tuesday, June 5th, as the registration day.

The above may be said to constitute the most important legislation which has been enacted since the Association had its last annual meeting. However, it is perhaps advisable to call attention to the Act of March 3, 1917, which contains

provision for an excess profits tax. This provides that every corporation and partnership, foreign as well as domestic, shall pay a tax on its net income of eight per cent. of the amount by which said net income exceeds the sum of five thousand dollars, and eight per cent. of the actual capital invested. The Act contains a definition of the term "actual capital invested." Certain exemptions are allowed for.

In addition to the foregoing there are now pending before Congress a number of very important tax measures. The House has just passed a bill increasing the minimum income tax to four per cent. and largely increasing the surtax rates. The exempted incomes are reduced to $1,000 in cases of single persons and $3,000 in cases of married persons. This Act, as it passed the House, makes the income tax features of it retroactive to include the year 1916, and makes other fundamental and far-reaching changes in the excise tax on corporation capital stock and the estate or inheritance tax. Also it makes changes in the postal rates now previling and imposes a tax upon numerous articles and occupations. The bill passed the House May 24, 1917, and is now being considered in the Senate. Inasmuch as it is not a law, your Committee considers it would be out of place to refer further to it, as it might tend to confusion in case radical changes are made in the Senate.

Your Committee is of opinion that the question of taxation, even war taxation, is one which should be approached with care and caution by the Congress.

But one further subject remains to be dealt with. There is pending in the House, a bill, known as H. R. 3671, to authorize the Supreme Court to prescribe forms and rules and generally regulate pleading, procedure and practice on the common law side of the Federal Courts. The bill is now pending before the Committee on the Judiciary, no report having been as yet made. This subject was dealt with by this Association three years ago; at that time a resolution was adopted at the annual meeting favoring the passage of this measure. A similar bill has been before Congress for several years and at one time or another has been passed by the Sen

ate and the House, but never by both houses at the same session. A number of the States have adopted this law, notably, Virginia, Colorado, Connecticut and New Jersey, and it is said that this bill has been endorsed by a larger number of bodies of business men, such as Chambers of Commerce, and trade bodies, than any other similar measure has ever received. It has been endorsed by the American Bar Association and by the Bar Associations of nearly every State in the Union.

It will be recalled that some years ago Congress passed a law authorizing the Supreme Court to establish new rules of practice on the equity side of the United States Courts and that, pursuant to that authority, the Supreme Court promulgated the equity rules now in force.

The object of this pending bill is to give to the Supreme Court power and authority to establish uniform rules of practice and procedure on the law side of these courts. It is familiar knowledge that at present this subject is controlled by Section 914, Revised Statutes, enacted June 1, 1872, which provides, in substance, that the practice, pleadings and forms and modes of proceeding on the law side of these courts shall conform as near as may be to the practice, pleadings and forms and modes of proceeding existing at the time in like causes in the State court where the suit is brought. This was an attempt to establish uniformity of pleading and practice in civil cases in the United States and State court where the suit was brought, but the expression "as near as may be" left a gap and, as a result, the pleading, practice and procedure is in many instances very dissimilar.

Since 1872 the United States Courts, in numerous decisions, have built up a system of pleading and practice applicable to civil cases on the law side of these courts highly technical and peculiar to them and it is the purpose of the pending measure to remedy this situation by the establishment of a uniform procedure and practice act for these courts on the law side.

The extent to which the complexity in the pleading and practice in such cases in these courts has gone is well illus

trated by a number of decisions, which have been collated and are submitted herewith as an addenda to this report.

It seems to be conceded that the proposed measure, if passed, will be constitutional:

Beers v. Houghton, 9 Pet., 329.

Bank of the U. S. v. Halstead, 10 Wheat., 51.
Lewis v. Shainwald, 7 Saw., 403;

Rose's Code of Federal Procedure, Vol. 1, 833.

Your Committee does not deem it within its province to argue or debate the merits of the proposed measure, although we are of opinion that "judicial procedure should be a complete, scientific, correlated system instead of a patchwork of disconnected statutes, decisions, rules and common law."

We recommend the adoption of a resolution reaffirming the support of this Association to the measure now before the Congress.

Respectfully submitted,

H. N. RANDOLPH, Chairman.
ROSCOE LUKE,

R. D. MEADER,

R. LEE MOORE,

GEORGE S. JONES,

Committee.

ADDENDA.

Decided cases holding that the Federal Courts are not bound by the practice and procedure obtaining in the courts of the State.

The expression "as near as may be" was fully considered and construed in the case of Indianapolis, etc., R. R. Co. v. Horst, 93 U. S., 300, and in Mexican R. R. Co. v. Pinkney, 149 U. S., 205. Also see Shepherd v. Adams, 168 U. S., 625.

A State statutory right to a change of venue denied in Kennon v. Gilmer, 131 U. S., 24. That the personal conduct and administration of a Federal judge was not affected by a State statute regulating the manner in which a jury should be charged was held in Nudd v. Burrows, 91 U. S.,

441. Uniformity does not extend to modes of procedure established by judicial interpretation of common law but only to statutes, was held in Wall. v. C. & O. R. R. Co., 95 Fed., 398. Actions at law, regardless of State statutes, must be brought in the name of the owner of the legal title, held in Norfolk Co. v. Sullivan, 111 Fed., 181. Statutory substituted service is not applicable to the Federal courts. Bracken v. Union P. R. R., 56 Fed., 447. A Federal rule of practice prevails regardless of a subsequent State statute altering the time in which a writ is returnable. Shepherd v. Adams, supra. Amendments of process and pleadings allowed by State statutes will not be followed when inconsistent with Federal statutes or amendments. Henderson v. Louisville R. R. Co., 123 U. S., 64. An equitable counter claim can not be set up in a Federal court. Church v. Speigleburg, 31 Fed., 601. The granting or refusing of a continuance is a matter within the discretion of the court notwithstanding a contrary State statute. Texas R. Co. v. Nelson, 50 Fed., 814. The selections of jurors does not follow the mode prescribed by State statutes. Brewer v. Jacobs, 22 Fed., 217. A State statute permitting a party to be examined by his adversary in advance of the trial will not be followed. Union P. Co. v. Botsford, 141 U. S., 257. The competency of witnesses depends upon Section 858, Revised Statutes, and not upon State statutes. To effect this it was held that Section 921, Revised Statutes, prevailed over Section 914, Revised Statutes; that the production of books and papers was regulated by Section 721, Revised Statutes, as amended and not by the State statutes; that the Federal courts might instruct a verdict or order a compulsory nonsuit or for the defendant or plaintiff, regardless of State statute. Vicksburg Co. v. Putnam, 118 U. S., 553. Instructions need not be in writing. Lincoln v. Power Co., 151 U. S., 442. A statute requiring instruction or a special verdict need not be observed. U. S. Mutual Co. v. Barry, 131 U. S., 119. The granting and refusing of new trials is not controlled by State statutes. Newcomb v. Wood, 97 U. S., 583. The question of costs is not governed by State statutes but by Section 823, Revised Statutes, which was held

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