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itself. Thus, Chief Justice Marshall, in Gibbons v. Ogden (9 Wheat.), said at page 196, referring to the power to regulate interstate commerce: "This power, like all others vested in Congress, is complete in itself, may be exercised to its utmost extent, and acknowledges no limitations other than are prescribed in the Constitution.' Again, in Brown v. Maryland (12 Wheat.), Chief Justice Marshall, considering the extent of the power to regulate commerce, said at page 446: "This question was considered in the case of Gibbons v. Ogden (9 Wheat. 1), in which it was declared to be complete in itself and to acknowledge no limitations other than are prescribed by the Constitution. The power is coextensive with the subject on which it acts and can not be stopped at the external boundary of a State, but must enter its interior."

3. The power to regulate interstate commerce extends not merely to the commerce itself but to all the agencies and instrumentalities employed in or appropriate to use in such commerce. Mr. Justice Field said, in Gloucester Ferry Co. v. Pennsylvania (114 U. S. at p. 204): "The power also embraces within its control all the instrumentalities by which that commerce may be carried on and the means by which it may be aided and encouraged. The subjects therefore upon which the power may be exerted are of infinite variety." And in Wilson v. New (the Adamson Act case, 243 U. S.), Chief Justice White said at page 349: "That the power to regulate also extends to many phases of the business of carriage and embraces the right to control the contract power of a carrier in so far as the public interest requires such limitation has also been manifested by repeated acts of legislation as to bills of lading, tariffs, and many other things too numerous to mention. Equally certain is it that the power has been exercised so as to deal not only with the carrier, but with its servants and to regulate the relation of such servants not only with their employers but between themselves. Illustrations of the latter are afforded by the hours of service act, the safety appliance act, and the employers' liability act." See also United States v. Ferger (250 U. S. at p. 203).

4. In the exercise of its power to regulate interstate commerce Congress is free to choose such methods and select such agencies as it deems best adapted to the purpose. This is illustrated by the cases above cited concerning Federal grants of power and authority to State corporations. The following references state the proposition in its broadest aspect: Chief Justice Marshall in M'Culloch v. Maryland (4 Wheat. at p. 421) said: "We think the sound construction of the Constitution must allow to the National Legislature that discretion, with respect to the means by which the powers it confers are to be carried into execution, which will enable that body to perform the high duties assigned to it in the manner most beneficial to the people. Let the end be legitimate, let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the Constitution, are constitutional. See also Interstate Commerce Commission v. Brimson (154 U. S. 447, 472); Ruddy v. Rossi (248 U. S. 104, 107).

5. The power to regulate interstate commerce is paramount to any power possessed by the States and any State interference is invalid whether by legislative act, municipal ordinance, executive order, or constitutional provision. It was said in the Minnesota Rate Case (230 U. S. at p. 399): "This reservation (as to internal commerce) to the States manifestly is only of that authority which is consistent with and not opposed to the grant to Congress. There is no room in our scheme of government for the assertion of State power in hostility to the authorized exercise of Federal power. The authority of Congress extends to every part of interstate commerce and to every instrumentality or agency by which it is carried on; and the full control by Congress of the subjects committed to its regulation is not to be denied or thwarted by the commingling of interstate and intrastate operations. This is not to say that the Nation may deal with the internal concerns of the State as such, but that the execution by Congress of its constitutional power to regulate interstate commerce is not limited by the fact that intrastate transactions may have become so interwoven therewith that the effective government of the former incidentally controls the latter. This conclusion necessarily results from the supremacy of the national power within its appointed sphere.

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In Wisconsin Railroad Commission v. C., B. & Q. R. R. Co. (257 U. S.), Chief Justice Taft said at page 590: "Congress as the dominant controller of interstate commerce may, therefore, restrain undue limitation of the earning power of the interstate commerce system in doing State work. The affirmative power of Congress in developing interstate commerce agencies is clear. * * In

such development it can impose any reasonable condition on a State's use of interstate carriers for intrastate commerce it deems necessary or desirable. This is because of the supremacy of the national power in this field." In Leisy v. Hardin (135 U. S. at p. 108), it was said: “And while, by virtue of its jurisdiction over persons and property within its limits, a State may provide for the security of the lives, limbs, health, and comfort of persons and the protection of property so situated, yet a subject matter which has been confided exclusively to Congress by the Constitution is not within the jurisdiction of the police power of the State, unless placed there by congressional action." In Oregon-Washington Railroad & Navigation Co. v. Washington, decided March 1, 1926, not yet. reported, an embargo of the director of agriculture of the State of Washington, acting under the authority of a State statute, against the transportation into Washington of alfalfa hay from certain sections of other States believed to be infected with alfalfa weevil, was held invalid on the ground that the Federal Secretary of Agriculture is invested by Federal statute with power as to quarantine in interstate commerce and that Congress has, therefore, assumed control of the whole subject matter. Chief Justice Taft said: "In the relation of the States to the regulation of interstate commerce by Congress there are two fields. There is one in which the State can not interfere at all, even in the silence of Congress. In the other, and this is the one in which the legitimate exercise of the State's police power brings it into contact with interstate commerce so as to affect that commerce, the State may exercise its police power until Congress has by affirmative legislation occupied the field by regulating interstate commerce and so necessarily has excluded State action.'

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In Colorado v. U. S., decided May 3, 1926, and not yet reported, the State complained of an order of the Interstate Commerce Commission authorizing the abandonment of a branch line of the Colorado & Southern, a corporation of that State, arguing that the charter of that corporation was a contract with the State by which the company assumed the obligation of providing intrastate service, that the extent and character of the intrastate service was the subject of regulation by the State and that the Interstate Commerce Commission could not relieve the corporation of its primary duty to furnish intrastate service. This argument was rejected by the Supreme Court, which held that the performance of unprofitable intrastate transportation service might deplete the resources of the corporation to the prejudice of interstate commerce and that Congress has the power to control intrastate commerce as a necessary incident of freeing interstate commerce from unnecessary burdens, obstructions, or unjust discrimination. The court said: "Because the same instrumentalities serve both, Congress has power to assume not only some control but paramount control in so far as interstate commerce is involved. It may determine to what extent and in what manner intrastate service must be subordinated in order that the interstate service may be adequately rendered." See also the recent decisions holding invalid as a burden upon interstate commerce the State laws permitting suits against foreign railroad corporations not owning or operating railroads within the State by plaintiffs not residing therein upon causes of action arising_elsewhere. (Davis, Director General v. Farmers Cooperative Equity Co., 262 U. S. 312; Atchison, Topeka & Santa Fe Ry. Co. v. Wells, 265 U. S. 101.) Á provision in the constitution of a State which conflicts with the Federal Constitution is invalid equally with an act of the legislature of the State so conflicting. (R. R. Co. v. McClure, 10 Wall. at p. 515; White v. Hart, 13 Wall. at p. 652; Cooley's Constitutional Limitations, 7th Ed., at p. 62.)

6. A railroad is private property. (I. C. C. v. Chicago Great Western, 209 U. S. at p. 118; Northern Pacific Ry. v. North Dakota, 236 U. S. at p. 595; Great Northern Ry. v. Minnesota, 238 U. S. at p. 346.)

R. S. LOVETT. (Thereupon, at 12.30 o'clock p. m., the committee adjourned until to-morrow, Thursday, May 27, 1926, at 10 o'clock a. m.)

RAILROAD CONSOLIDATION

HOUSE OF REPRESENTATIVES,

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

Thursday, June 3, 1926.

The committee met at 10 o'clock a. m., Hon. James S. Parker (chairman) presiding.

The CHAIRMAN. The committee will please come to order. Commissioner Hall.

STATEMENT OF HENRY C. HALL, COMMISSIONER, INTERSTATE COMMERCE COMMISSION

Mr. HALL. Mr. Chairman and gentlemen of the committee, for the record I should perhaps state that I am a member of the Interstate Commerce Commission and have been since 1914.

Some weeks ago the commission received a draft of H. R. 11212, known as the Parker bill, to promote the unification of carriers engaged in interstate commerce and for other purposes, with the request from the chairman of the committee for the views of the commission upon that bill.

Those views were put into the form of a report addressed to the chairman under date of May 11. They were formulated by our legislative committee, of which former Congressman Esch is the chairman, but they were submitted to the commission in conference. The views therefore as embodied in that report, having received the approval of the commission, represent the views of the entire commission and not merely of the legislative committee.

Perhaps it would be appropriate at this time, Mr. Chairman, if I should present those views as thus formulated.

The CHAIRMAN. Was the report unanimous?
Mr. HALL. Unanimous; yes, sir.

The CHAIRMAN. That report was circulated.

Mr. HALL. That has been circulated, Mr. Chairman, but as I understand it, it is not in the record of this proceeding. I said "unanimous.' I think that Mr. Commissioner Campbell was in the West at the time of this conference, but it reached his office and there has been no expression of a different view from him.

Mr. HUDDLESTON. May I suggest, as the committee has had that for 10 days already, would it not be just as well, instead of rereading it now, to devote the time to a further discussion of the bill?

The CHAIRMAN. I think that we can insert that in the record and save your reading it, because that report was distributed to the committee and every member of the committee has a copy of it.

Mr. HALL. Very well. Then this report signed by John J. Esch for the legislative committee, addressed to the chairman of this committee, and bearing date of May 11, is here offered for the record.

The CHAIRMAN. It is received and will be printed in the record as the views of the commission.

(The report referred to is as follows:)

Hon. JAMES S. PARKER,

Chairman Committee on Interstate and Foreign Commerce,

MAY 11, 1926.

House of Representatives.

MY DEAR MR. CHAIRMAN: The legislative committee of this commission submits the following report upon H. R. 11212 in response to your request therefor dated May 1, 1926, and received May 4:

The views of the majority of the commission as to needed changes in the provisions of section 5 of the interstate commerce act in respect of consolidation of railroads were set forth in a letter dated February 4, 1925, addressed to the chairman of the Senate Committee on Interstate Commerce, and in a proposed amendment to section 5 transmitted therewith. These views are summarized on pages 13 and 14 of our thirty-ninth annual report to the Congress. They were further stated by Chairman Eastman, of this commission, in a hearing before that committee on January 22, 1926, at which a text of the proposed amendment was submitted as appearing on pages 39-66 of the print of hearings on S. 1870 herewith transmitted. On page 58 he summed up the recommendations of the majority of the commission and the desiderata of such amendment as follows: Briefly, the bill—

1. Relieves the commission from its present duty of adopting a complete plan of consolidation.

2. Makes unlawful any consolidation or unification in any form, direct or indirect, except with the specific approval and authorization of the commission. 3. Gives the commission broad power to approve or disapprove such consolidations or unifications as may be proposed and to make such modifications and attach such terms and conditions prior to approval as it may find just and reasonable.

4. Specifically authorizes the commission to disapprove a consolidation or unification upon the ground that it does not include a carrier that ought to be included and can be included upon reasonable terms.

5. Specifically authorizes the commission to make it a condition of any consolidation or unification that existing routes and channels of trade and commerce shall be maintained.

6. Authorizes the commission to utilize, in reaching its conclusions with respect to any consolidation or unification proposed, all records and other evidence heretofore taken and now in its files, under the terms of the section as heretofore enacted.

7. Modifies the provision which limits the capitalization of the consolidated corporation to the value of the combined properties, by enabling the commission to arrive at a value for this purpose either by utilizing the results of the valuation under section 19a or otherwise.

The bill opens the door to all consolidations or unifications of railroad properties that may be shown to be in the public interest. It does not attempt to force the process in any way, but permits it to develop naturally in the increasing light of experience, subject to the guidance of the commission.

The bill H. R. 11212 which you now submit so largely meets these desiderata, as well as the views expressed by or on behalf of other members of the commission, as to embody a betterment of existing law which is fully jusitfied by our experience and observation. The changes which we suggest for your consideration center around the provisions of this bill as to condemnation including the work assigned to this commission or a division thereof in connection with such condemnation. These provisions are found in sections 212 and 213 of the bill and are confined, as we understand, to condemnation of voting securities held by a nonassenting holder, and of property other than securities, or any right or interest in any such property, held or enjoyed without power of assignment or transfer.

As to securities, paragraph (1) of section 212 provides that any holder of a voting security issued by any carrier a party to the plan, who did not vote for the adoption of the plan, may, within 90 days after the meeting at which the

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