was enjoined; another was the Kansas commission, where a complicated situation existed, which will be later explained to you; the other two were States where the carriers refused to comply with the plain provisions of the State law, that increases in rates applied for must be shown to be necessary by evidence offered. Senator LA FOLLETTE. Will you name the State where the injunction was invoked and the other two States referred to, if you are able to do so. Mr. BENTON. The State where the injunction was granted was North Dakota. In that State the commission allowed the advances, both passenger and freight, asked for by the carriers, practically pro forma. The State supreme court enjoined the advances, as I now remember it, upon the ground that the commission had not met and acted as a body, only one member being present. Following that the commission met and, acting as a body, granted the increases. The State supreme court then enjoined the advance under the second order named upon the ground that there had been no real investigation of the merits of the proposed application. Thereupon the commission proceeded, under the order of the court, and entered upon an investigation, which disclosed that the rates in North Dakota were already on a level sufficiently high so that they ought not to be raised, and finally the advance was denied by the North Dakota commission upon that ground. The question may arise in the mind of Senator La Follette, or in the mind of any other Senator, how it happens that in North Dakota there was no occasion for an increase in rates if the situations in other States required increases. I was not counsel in that particular case. I have been advised, however, by Mr. Karl Gartner, who conducted the proceeding for the State commission-and I am sure he is known to members of this committee, as he was long connected with the Interstate Commerce Commission-that the explanation of that somewhat peculiar fact is this: That in years gone by in the States of Minnesota and South Dakota the people were fortunate in having commissions that were active; that there had been rate reductions in those States which were not accompanied by a corresponding rate reduction in North Dakota. So that the situation was that without the advance as it was allowed to take effect in Minnesota and in South Dakota the rates were already on a substantially corresponding level in North Dakota. And the investigation made by the North Dakota commission indicated that upon a valuation which they made under the then existing rates and under any normal movement of traffic, the carriers were already earning in excess of 6 per cent. That is the State where the injunction proceedings occurred. Now then, the States where the carriers refused to comply with the law were Senator LA FOLLETTE (interposing). Really then the situation was that the commission, after being twice enjoined, on investigation reversed its former action? Mr. BENTON. Yes; reversed its pro forma action. But the records show that there was no real investigation of the merits, and the action of the Supreme Court in granting the injunction prayed for was upon that ground. The two States where the carriers refused to comply with the law which forbade the. State commissions to allow an advance except upon application made and proof produced that the advance asked for would be reasonable, were the States of Arizona and Nevada. In those States the carriers refused to introduce any evidence whatever, claiming that the States were foreclosed as to their action on intrastate rates by the order which the Interstate Commerce Commission had made as to interstate rates. The chairman of the Public Service Commission of Nevada will make a particular statement to you with respect to the Nevada situation, which corre sponds in a general way with the situation in Arizona. And I think you will reach the conclusion that the reason the carriers refused to make the showing required by law was because they could not do it, because the rates in those States, both interstate and intrastate, were already on a basis so high that to propose further increases was to propose what any tribunal making an Investigation and considering evidence would conclude was unreasonable. At any rate the carriers refused to comply with the law and to make even a prima facie showing, and thereby unless the lack of evidence was in some way supplied by the action of somebody else the carriers themselves made it impossible that the commissions should grant the increases which they claimed to want and, in a pro forma way but not in compliance with the law, did apply for to the State commissions. They claimed that they were exempt from the requirement of the law to justify their increases, and that the State commissions must permit as to State rates the identical increase allowed as to interstate rates without proof or consideration of the necessity or reasonableness of such increase. In these two States the carriers themselves, therefore, made impossible the allowance of the advances they sought. I come now to state what advances the State commissions allowed. STATE FREIGHT RATE ADVANCES. First, as to freight rates, the percentages allowed by the Federal Government were allowed in every State in the eastern district except Indiana and Illinois, where the commissions allowed, instead of 40 per cent, 333 and 35 per cent, respectively. In the southern district the 25 per cent advance was allowed in every State. In the western district the 35 per cent advance was allowed by every State except North Dakota, and I have explained what the situation was there, and Kansas. Nebraska, and Texas, which States allowed, respectively, 30, 35, and 33 per cent. I will make more particular mention of these cases a little later, and a particular statement will be presented as to one of these. In the Mountain-Pacific group the full 25 per cent was allowed in every State except the two where the carriers refused to comply with State law, by making a prima facie showing of necessity. STATE PASSENGER RATE ADVANCES. As to passenger rates, except in the two States of Arizona and Nevada, the advances asked for were allowed in every State where there were not passengerfare statutes except three, which I will mention more particularly later. EXCEPTIONS AS TO CERTAIN COMMODITY RATES. What I have said with respect to freight rates is subject to the qualification that in various States exceptions were made as to certain commodities according to the necessities of the local situation as found by the commission. The reat body of intrastate freight rates, however, was advanced the same percentage as interstate rates hal been, with the exceptions noted. Except in Kansas the results which I have stated were accomplished within 'wo months from the time when the Federal commission made its decision in ex parte 74, a record which I think you will consider nothing less than pheHomenal. COMPILATION SHOWING RATE ADVANCES GRANTED BY STATE COMMISSIONS. For the purpose of showing how generously the carriers were treated by the State commissions, I offer a tabulated statement which shows the action of ach commission. (The tabulation referred to is here printed in full, as follows:) Tabulation showing action of State regulatory commissions on carriers' applications for rate advances since Aug. 1, 1920. Same as I.C. C. 1 Carriers refused to offer evidence to justify increases asked, as required by State law, claiming I. C. C. order obligated the State commission to grant identical increases. 2 Without commission action. Delaware has no commission. 4 Illinois is partly in eastern, partly in southern, and partly in western territory. I. C. C. advances 40 per cent eastern, 35 per cent western, and 25 per cent southern. The increase permitted by Illinois was not a flat percentage but upon rate schedules estimated by the Illinois commission to yield over 35 per cent increase. 5 Without commission action. Tabulation showing action of State regulatory commissions on carriers' applications for rate advances since Aug. 1, 1920-Continued. Switching charges in connection with |