Mr. BELCHER. No; that case has not been. I am talking about the Lake Cargo case. The suspension case is before the commission, which the commission has not passed any opinion on, and is not, of course, expected to.

The CHAIRMAN. Is that all, Mr. Clark?

Mr. CLARK. Mr. Chairman, it has been suggested that if the commission has the power to enter an order the effect of which is to transfer some prosperity from one locality to another it has the power to destroy industry in one locality and build it up in another. If the commission were so minded, it could carry that to extremes. It is like any other exercise of power. It could be abused. But unless the regulation is done by the Congress directly under its powers or through an administrative tribunal named by the Congress to which it delegates some of its powers, under a rule of law laid down by the courts, there is no way to regulate it and the matter would be left to the carriers. I do not think that any of these gentlemen that are interested in this or any other controversy would like to see that power transferred back to the carriers. It was the fact that they were doing exactly that thing that led to the enactment of this law in 1887.

Senator GOODING. Who was doing that?

Mr. CLARK. The railroads were doing exactly that thing.
Senator GOODING. At that time.

Mr. CLARK. At that time.

Senator GOODING. Yes.

Senator HAWES. You mean through rebates and other ways? Mr. CLARK. Favoritisms and discriminations. Rebates. Every other way.

Senator NEELY. You understand that we contend that the Lake Cargo decision in effect did just what the commission was created to prevent, namely, the giving of rebates to one producer at the expense of another?

Mr. CLARK. Well, I understand that to be your contention, Senator, and I also understand that not all of the people agree with

you.

Senator NEELY. The commission does not agree with me.

Mr. CLARK. The thought that I particularly wanted to suggest to the committee, Mr. Chairman, is this, that here is a tribunal that has existed for a good many years. It has won the confidence of the public at large in a very unusual degree. It has been dealing all this time and must always deal as long as it exists with controverted questions as to which no human could make a decision that would satisfy both sides. I know of no instance in which any man who has sat upon that commission has been accused even by suggestion of any ulterior or improper motives. That commission is entitled to the confidence of the country so long as it conducts itself in the manner in which it has conducted itself.

We had a picture not very long ago which was given a great deal of prominence, in which a man was suggested for membership on that commission with the avowed purpose of bringing about a decision in this very matter favorable to the State from which he came. I do not know the gentleman. I concede that he is an able, highminded man who otherwise would have made a desirable member of the commission. But the Senate, I say, very properly rose in its

dignity and said: "We will not confirm a man who is appointed under those conditions or for those purposes."

Senator GOODING. Well, Mr. Clerk, he disqualified himself in this particular case. He would not have sat upon it had the cases been brought before him.

Senator COUZENS. Oh, but he would have had other cases affecting Pennsylvania.

Mr. CLARK. The purposes for which he was named were verySenator WHEELER. Apparent.

Mr. CLARK (continuing). Were very widely distributed through the newspapers.

Senator GOODING. Well, do you think he was named for that purpose?

Mr. CLARK. Sir?

Senator GOODING. Do you think he was named for that purpose? Mr. CLARK. The man who championed him on the floor of the Senate said so.

Senator GOODING. I do not remember him saying anything of the kind in that language at all.

The CHAIRMAN. Do not let us argue that case, gentlemen.

Mr. CLARK. What I ask, Mr. Chairman, is that the Senate shall do the same thing now on the other side. And do not undertake to crucify a member of the commission whose term happens to expire after a decision is made in a controverted case which displeases one side and naturally pleases the other, picking it out from a multitude of cases that the commission disposes of every year-do not let those men who are working hard and industriously bearing a heavy burden in an effort to keep up with the work that is at hand, in an effort to do its duty, feel that they have got to weigh, especially as their term of office approaches completion, so far as their appointment is concerned-feel that they have got to be worried, and perhaps somebody among them might have to stop and think: Now, if I vote this way or if I vote that way, which side will raise the densest fog?" It is not fair to the commission as an institution, and that is the reason that I have come to express my views for whatever they may be worth.

Senator WHEELER. Mr. Clark, would you let me ask you a question?

Mr. CLARK. Sir?

Senator WHEELER. I have before me the conclusions in this particular case in which Mr. Ech says:

* * ** in reaching our conclusions upon the question of reasonableness, we have taken into consideration the unusually favorable circumstances and conditions surrounding the movement of lake cargo coal, which make the rates thereon in a class by themselves; the relatively much lower rates from the southern districts, which the carriers serving those districts find profitable to maintain; the very

This is the point that I want to call your attention to

the very decided change in the relative tonnage of lake cargo coal shipped from the complaining Pittsburgh and Ohio districts and the southern districts, respectively; the present depressed condition of the coal-mining industry in the Pittsburgh and Ohio districts; and the fact that the cost of the service warrants a substantial reduction in the rates.

Now, if I understand your statement correctly you do not feel that the commission has any right to base its decision upon the prop

osition that a depressed condition in the coal-mining industry is going on in one place while it is going ahead in another place?

Mr. CLARK. Only to the extent that it can be directly shown to be the effect of a maladjustment of rates.

Senator WHEELER. Yes; but here as I read this, Mr. Clark, this conclusion is based entirely

Mr. CLARK. Well, Senator, I have said before that I had no connection whatever with that case.

Senator WHEELER. I understand, Mr. Clark.

Mr. CLARK. I am not conversant or familiar with the record in the case. I am not going to criticize the vote of a member of the commission. It may well be that if I had been a member of the commission I would have disagreed with Mr. Esch. I served on a division over there with him and I found that we disagreed more than once. But that did not to my mind justify my condemning him. I might be wrong and he right.

Senator WHEELER. Oh, of course.

Mr. CLARK. I do not know of any man that is always right.
Senator WHEELER. I do not think anybody wants to

The CHAIRMAN. Nobody but a Senator.

Senator HAWES. How long did you serve with Mr. Esch, Mr. Clark? Mr. CLARK. What year were you appointed (addressing Commissioner Esch)?

Commissioner ESCH. March, 1921.

Mr. CLARK. Well, I was there only from the 1st of March until the 1st of September with him.

The CHAIRMAN. Any other questions?

The CHAIRMAN. All right.

Senator GOODING. You make the statement, Mr. Clark, that a certain man was appointed to carry out a specific purpose. What protection has the Senate against a condition of that kind, if it is true? I do not agree with you myself. I do not think Mr. Woods was appointed for a specific purpose-I do not care who makes that statement. And I do not believe that Commissioner Esch has been reappointed because he changed his opinion in this particular case. Your statement, however, lends color to the statement that is made here that he has been appointed for one purpose, which has been made over and over again.

Mr. CLARK. What statement did I make that gives any color to that?

Senator GOODING. The statement that the man was appointed to carry out a specific condition and for a specific purpose.

Mr. CLARK. I stated what the man who championed his appointment on the floor of the Senate said, as was reported in the newspapers, and as I am confident it will appear in the Congressional Record.

Senator GOODING. I do not remember of any such statement. He may have made it outside of the floor of the Senate, but not on the floor of the Senate.

Mr. CLARK. He made it outside of the floor and in the Senate, too. Senator WHEELER. I think it was stated in the newspapers to the effect that he made that statement, as I recall it.

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Senator GOODING. I think it was charged that he made it, but he denies it. I do not remember that statement, and I think Mr. Clark's statement is rather unfortunate in that respect.

The CHAIRMAN. We are very much obliged to you, Mr. Clark. Senator NEELY. Mr. Chairman, it is understood, I presume, that Mr. Clark has not appeared as a witness for the opponents of the confirmation.

The CHAIRMAN. He appears voluntarily and said to me that he would like to be heard. Of course, because of my respect for Mr. Clark, I was entirely willing to give him the opportunity.

Senator NEELY. But I want the committee to understand that he is not our witness.

Senator WHEELER. I do not know who Mr. Clark is representing. Himself?

Senator COUZENS. He said he represented himself.

Senator BARKLEY. Amicus curiae.

Senator WHEELER. Yes; friend of the court.

Senator NEELY. Are you practicing exclusively before the commission, Mr. Clark?

Mr. CLARK. Practically all of our business is before the commission; yes.

Senator NEELY. How long have you been practicing exclusively before the commission?

Mr. CLARK. Since I went off the commission in 1921.

The CHAIRMAN. We will adjourn until 10.30 Thursday morning, at 212 Senate Office Building. We hope to complete these hearings that day.

(Thereupon, at 4.30 p. m. Tuesday, February 21, 1928, an adjournment was taken until 10.30 a. m. Thursday, February 23, 1928, in room 212 Senate Office Building.)

CONFIRMATION OF JOHN J. ESCH

THURSDAY, FEBRUARY 23, 1928

UNITED STATES SENATE,

COMMITTEE ON INTERSTATE COMMERCE, Washington, D. C. The committee met, pursuant to adjournment, at 10.30 o'clock a. m., in the committee room, Capitol, Senator James E. Watson presiding. Present: Senators Watson (chairman), Couzens, Fess, Sackett, and Hawes.

Present also: Senator Neely, of West Virginia; Senator Barkley, of Kentucky; and Senator Glass, of Virginia.

The CHAIRMAN. The committee will be in order. Mr. Esch, did you have any further statement to make to the committee?

STATEMENT OF HON. JOHN J. ESCH, A MEMBER OF THE INTERSTATE COMMERCE COMMISSION-Resumed

Commissioner ESCH. Mr. Chairman, there was a question asked me, I think on Tuesday, as to the authorship of the first and second reports. I stated that the first report was by Commissioner Hall and that the second report was by the commission. In order that there may be no misunderstanding, I wish to state that when Commissioner Hall prepared the second report and brought it to the attention of the commission there was a majority against it, he having affirmed in the second report the views he had expressed in the first; and, the majority of the commission having voted against Commissioner Hall's second report, thereupon it had to select some member of the commission to take charge of the case. It was allotted to me by a vote of the commission against my desire and against my protest, but when a majority votes it is mandatory upon the commission. I, therefore, took the report and made such modifications in the report as would be consonant with the findings which the majority of the commission had expressed. Those findings are already printed in the hearings as a part of my testimony. I thought I ought to make that statement in order to clarify the situation.

Senator HAWES. Mr. Chairman, before Commissioner Esch concludes I would like to call attention to one matter. The commissioner stated that in changing his mind he was influenced by some new evidence and by the Hoch-Smith resolution. Since arriving here I have been informed that the commission as a whole took up the Hoch-Smith resolution; there had been filed for their consideration 10 or 15, and some one said as many as 30, briefs interpreting the Hoch-Smith resolution; and that after the presentation of the briefs

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