tices to the Attorney General, who, in his discretion, may institute the necessary criminal proceedings under this Act. (b) Upon application of the Commission the District Courts of the United States, the Supreme Court of the District of Columbia, and the United States courts of any Territory or other place subject to the jurisdiction of the United States shall have jurisdiction to issue writs of mandamus commanding any person to comply with the provisions of this Act or any rule, regulation, or order of the Commission thereunder. (c) The Commission may employ such attorneys as it finds necessary for proper legal aid and service of the Commission or its members in the conduct of their work, or for proper representation of the public interest in investigations made by it, or cases or proceedings pending before it, whether at the Commission's own instance or upon complaint, or to appear for or represent the Commission in any case in court; and the expenses of such employment shall be paid out of the appropriation for the Commission. GENERAL PENALTIES SEC. 20. (a) Any person who willfully and knowingly does or causes or suffers to be done any act, matter, or thing in this Act prohibited or declared to be unlawful, or who willfully and knowingly omits or fails to do any act, matter, or thing in this Act required to be done, or willfully and knowingly causes or suffers such omission or failure, shall, upon conviction thereof, be punished by a fine of not more than $5,000 or by imprisonment for not more than two years, or both. (b) Any person who willfully and knowingly violates any rule, regulation, restriction, condition, or order made or imposed by the Commission under authority of this Act, shall, in addition to any other penalties provided by law, be punished upon conviction thereof by a fine of not exceeding $500 for each and every day during which such offense occurs. JURISDICTION OF OFFENSES; ENFORCEMENT OF LIABILITIES AND DUTIES SEC. 21. The District Courts of the United States, the Supreme Court of the District of Columbia, and the United States courts of any Territory or other place subject to the jurisdiction of the United States shall have exclusive jurisdiction of violations of this Act or the rules, regulations, and orders thereunder, and of all suits in equity and actions at law brought to enforce any liability or duty created by, or to enjoin any violation of, this Act or any rule, regulation, or order thereunder. Any criminal proceeding shall be brought in the district wherein any act or transaction constituting the violation occurred. Any suit or action to enforce any liability or duty created by, or to enjoin any violation of, this Act or any rule, regulation, or order thereunder may be brought in any such district or in the district wherein the defendant is an inhabitant, and process in such cases may be served wherever the defendant may be found. Judgments and decrees so rendered shall be subject to review as provided in sections 128 and 240 of the Judicial Code, as amended (U. S. C., title 28, secs. 225 and 347). No costs shall be assessed against the Commission in any judicial proceeding by or against the Commission under this Act. SEPARABILITY OF PROVISIONS SEC. 22. If any provision of this Act, or the application of such provision to any person or circumstance, shall be held invalid, the remainder of the Act, and the application of such provision to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby. SEC. 23. This Act may be cited as the Natural Gas Act. Mr. LEA. It is the intention of the committee first to hear the representatives of the Federal Power Commission and the Federal Trade Commission. Before the hearings are completed we hope to hear from interested parties as largely as is necessary to cover the subject. At this time we will hear Mr. DeVane, representing the Federal Power Commission. Mr. DeVane, you may proceed in your own way. STATEMENT OF DOZIER A. DeVANE, SOLICITOR, FEDERAL POWER COMMISSION, WASHINGTON, D. C. Mr. DEVANE. Mr. Chairman and members of the committee, my name is Dozier A. DeVane. I am solicitor for the Federal Power Commission and have been in that position now for approximately 22 years. I appear here this morning at the request of the chairman of your full committee and of your subcommittee, and that the record may be clear, may I also state that I do not appear in the capacity of a representative of the administration in connection with any legislation that it has submitted to the Congress. This committee will recall that as a part of H. R. 5423 was title III, which had for its purpose the regulation of this industry. Title III of that bill was substantially the same in language as the part of title II that related to the regulation of the electric industry. Substantially the only difference was that gas was substituted for electricity in the language of the bill. After the hearings upon that bill, titles II and III—when I refer to title II, I mean that part of the bill providing for an amendment to the Federal Water Power Act bringing under Federal regulation electric utilities-both that title and title III, which provided for the regulation of the natural-gas industry was referred to the same subcommittee and considered by the same subcommittee. I suppose it is not out of place if I should say for the record here that title III, which related to the regulation of the gas industry was not reported out with title I and title II. The bill that you have now, H. R. 11662, is in substantially all respects, insofar as it goes, similar to the provisions of the Federal Power Act with reference to the electric industry. The bill itself does not go quite as far as nor does not confer quite as much jurisdiction upon the Commission as does the Federal Power Act. I shall not, in my presentation this morning, undertake to discuss the gas industry, as this committee knows an investigation with reference to that subject has been made by the Federal Trade Commission under Senate Resolution 83, Seventieth Congress, first session, and a representative of that Commission will appear and present to the committee factual data that were developed by that investigation. I would like to state, however, briefly at the outset just a few facts with reference to the industry so as we talk about the provisions of this bill we may have in mind, to some extent, the picture of what the industry is. As you know, the gas industry as it is today, has developed primarily since 1926 with the invention of the seamless pipe. Natural gas as such has been in use for 50 years or more in this country and there was some transportation in interstate commerce prior to 1926, but the substantial development in the industry has occurred since that time. Now, with that in mind, you can get some idea as to how it has developed and as to the reasons and the necessities for some measure of Federal control by a very brief description of the industry as it is today. In 1935 natural gas was being supplied to some 7,000,000 independent customers, representing a population of 32,400,000 people, in communities in 35 States of the Union. There are five principal areas in the United States in which natural gas in produced in large quantities: The Appalachian, southern, midcontinent, Rocky Mountain, and California fields. The Appalachian field is located in the States of New York, Pennsylvania, Ohio, West Virginia, and Kentucky. It includes the Tioga, Wayne-Dundee, the West Virginia, the eastern Ohio, the western Pennsylvania, and the Kentucky producing areas. There is pipe-line construction throughout this field which reaches the seaboard and the Great Lakes and connects in Indiana with lines from the Panhandle area in Texas. The southern area is located in northern Louisiana, and the two main fields therein are the Monroe and Richland fields. Monroe is in northeast Louisiana and Richland some 25 miles southeast of that. There is pipe-line construction from this area to Atlanta, Ga.; Pensacola, Fla.; New Orleans, La.; Memphis, Tenn.; and St. Louis, Mo. There is also construction from this area into northeastern Arkansas and westward to the border of the Texas-Louisiana line, connecting with lines extending from the Texas Panhandle field. The southern area also includes small fields located in southern Texas, pipe lines from which extend to Monterey, Mexico. The mid-continent field includes the Texas Panhandle field-the largest reserve of natural gas in the United States. There is pipeline construction from the Texas Panhandle extending as far northeastward as Minneapolis and St. Paul, Minn., and as far east as Chicago; and the Panhandle-eastern pipe line from the field extends as far as the Illinois-Indiana State line, where it connects with the Columbia Oil & Gasoline Corporation lines, that being a subsidiary of the Columbia Gas & Electric Corporation. To the northwest the Texas Panhandle pipe lines extend as far as Cheyenne, Wyo. The Rocky Mountain area includes individual fields located in Montana, Wyoming, and Utah, and some in the State of New Mexico. The California field is situated in the southwestern section of California and generally parallels the coast line. Pipe lines from that field extend to San Francisco and Sacramento in the north and as far south as San Diego. The As before stated, the Texas Panhandle is the largest of the producing fields. It is located in the northwestern part of the State. first well as drilled in 1918. Thereafter development was not carried on very actively for some time, but it became active in 1925. The field contains more than 1,000,000 acres and extends more than 100 miles in the southeasterly direction in the Panhandle section of the State through seven counties. The volume of recoverable gas is estimated at from 14 to 20 trillion feet. There are today slightly in excess of 50,000 miles of pipe line. There are 11 holding-company groups interested in natural-gas pipe lines in the United States. Mr. MERRITT. Is that 50,000 miles from the Texas field, or all? Mr. MERRITT. In the whole United States? Mr. DEVANE. Yes, sir. These 11 companies own 38,093.63 miles out of the 50,000 total mileage of pipe-line construction in the United States-about 76 percent. The Columbia Gas & Electric Corporation owns the largest percentage-12,347 miles, or more than 24 percent. The next largest in point of ownership is the Cities Service Co., with 7,009 miles, or 14.02 percent. Next comes the Electric Bond & Share group, with 5,331 miles, or 10.66 percent, this being the combined mileage ownership of the Electric Power & Light Corporation and American Power & Light Co., subholding companies. The next largest owner is the Standard Oil Co. of New Jersey, with 4,419.57 miles. The four groups, above named, own 58.21 percent of the total pipe-line mileage in the United States, as of the end of 1931. In addition to this 58 percent, Cities Service Co. and Standard Oil Co. of New Jersey, have an interest in the jointly owned pipe line which runs to Chicago and is owned by the Natural Gas Pipe Line Co. of America. Cities Service owns 26.62 percent of this line, and Standard Oil, 13.31 percent. After these four holding companies the next largest pipe-line owner is the Lone Star Gas Co., with 4,121.17 miles, or 8.24 percent. The next largest in point of ownership in pipe line is the North American Light & Power Co., and after that comes Minnesota Northern Power Co. with 1,005 miles. The Electric Bond & Share Co. group produced 25.32 percent of the total available natural gas in the United States produced by all companies reporting to the Federal Trade Commission under Senate Resolution 83, Cities Service produced 18.15 percent, Columbia Gas & Electric Corporation 14.79 percent, and Standard Oil Co. of New Jersey produced 8.53 percent. These four holding company systems thus produced 66.7 percent of the production of natural gas by companies reporting to the Federal Trade Commission. In 1930, 380,601,000,000 cubic feet of natural gas went across State or international boundary lines. Of this amount, 280,000,000,000 came from seven companies, and the four holding company systems named above-Cities Service, Electric Bond & Share, Columbia, and Standard Oil-transported 240,000,000,000 feet. Now, I have caused to be placed before each member of the committee a brief I have prepared upon the constitutionality of this bill. (The brief referred to is as follows:) H. R. 11662—A BILL TO REGULATE THE TRANSPORTATION AND SALE OF NATURAL GAS IN INTERSTATE COMMERCE, AND FOR OTHER PURPOSES BRIEF IN SUPPORT OF CONSTITUTIONALITY (APR. 2, 1936) (Dozier A. DeVane, solicitor, Thomas J. Tingley, assistant solicitor, Federal Power Commission) I. INTRODUCTION H. R. 11662, introduced by Mr. Lea of California on March 6, 1936, proposes to bring under Federal regulation the transportation of natural gas in highpressure mains in interstate commerce, its sale for ultimate distribution to the public in interstate commerce, and persons engaged in such transportation and sale. This brief is submitted in support of the constitutionality of the bill. II. THE POWER OF CONGRESS TO REGULATE INTERSTATE COMMERCE By article 1, section 8, clause 3, of the Constitution of the United States, the Congress is given the power * * To regulate commerce with foreign nations, and among the several States, and with the Indian tribes." This clause was construed by Chief Justice Marshall in the leading case of Gibbons v. Ogden (9 Wheat. 1, 196) as conferring upon Congress the 66* * * power to regulate; that is, to prescribe the rule by which commerce is to be governed. This power, like all others vested in Congress, is complete in itself, may be exercised to its utmost extent, and acknowledges no limitation, other than are prescribed in the Constitution." Where the activities of an enterprise extend beyond the confines of a single State and the character of the business is interstate commerce, the authorities are numerous sustaining its subjection to Federal, and under certain conditions its immunity from State, regulation. See Gibbons v. Ogden, supra; Pensacola Tel. Co. v. Western Union Tel. Co., 96 U. S. 1, 9; Western Union Tel. Co. v. Pendleton, 122 U. S. 347; Champion v. Ames, 188 U. S. 321; International Text Book Co. v. Pigg, 217 U. S. 91; Western Union Tel. Co. v. Foster, 247 U. S. 105; Dahnke-Walker Co. v. Bondurant, 257 U. S. 282; Binderup v. Pathe Exchange, 263 U. S. 291; Missouri v. Kansas Natural Gas Co., 265 U. S. 298; Public Utilities Comm. v. Attleboro Steam and Electric Co., 273 U. S. 83. It has been definitely settled by the Supreme Court of the United States that the transmission of electricity from one State to another is interstate commerce within the meaning of the Constitution (Public Utilities Commission v. Attleboro Steam and Electric Co., supra). Similarly, the interstate transportation of gas from one State to another has been held to be interstate commerce (Pennsylvania Gas Co. v. Public Service Comm., 252 U. S. 23; East Ohio Gas Co. v. Tax Commission of Ohio, 283 U. S. 465; Public Utility Commission of Kansas v. Landon, 249 U. S. 236; Missouri v. Kansas Natural Gas Co., supra). It is well established that Congress, acting in the scope of its delegated authority, has the same plenary power that the States enjoy to employ any regulatory device which it deems reasonably adapted to the public welfare. As Mr. Justice Brandeis said in his opinion in Hamilton v. Kentucky Distilleries & Warehouse Co., 251 U. S. 146, 156: "That the United States lacks the police power, and that this was reserved to the States by the tenth amendment, is true, but it is none the less true that when the United States exerts any of the powers conferred upon it by the Constitution, no valid objection can be based upon the fact that such exercise may be attended by the same incidents which attend the exercise by a State of its police power, or that it may tend to accomplish a similar purpose." * In subsequent decisions involving the power of Congress to regulate interstate commerce, the Court has spoken of a "police power * * within the field of interstate commerce" (Brooks v. United States, 267 U. S. 432-437), and of business "affected by a public use of a national character and subject to national regulation." (Stafford v. Wallace, 258 U. S. 495, 516; Chicago Board of Trade v. Olsen, 262 U. S. 1, 41). Clearly the power of Congress over interstate commerce may be exercised to the same extent and for the same purposes as the power of a State over commerce wholly within its borders. In this connection, the following cases also may be cited: Hamilton v. Kentucky Distilleries & Warehouse Co., supra; Brooks v. U. S., supra; Stafford v. Wallace, supra; Chicago Board of Trade v. Olsen, supra; Champion v. Ames, supra; Missouri, Kansas & T. Railroad Co. v. Haber, 169 U. S. 613, 621; Reid v. Colorado, 187 U. S. 137, 149-150; Hoke v. U. S., 227 U. S. 308; Caminetti v. U. S., 242 U. S. 470; Weber v. Freed, 239 U. S. 325; In re Rahrer, 140 U. S. 545; Clark Distilling Co. v. Western Maryland Railway Co., 242 U. S. 311; Alabama v. Arizona, 291 U. S. 286; Panama Refining Co. v. Ryan, 293 U. S. 388; Hippolite Egg Co. v. U. S., 220 U. S. 45; Weeks v. U. S., 245 U. S. 618; Seven Cases v. U. S., 239 U. S. 510; Public Utilities Comm. v. Attleboro Steam and Electric Co., supra; Missouri v. Kansas Natural Gas Co., supra; Federal Radio Commission v. Nelson Brothers Bond and Mortgage Co., 289 U. S. 266; Railroad Retirement Board v. Alton R. R. Co., 295 U. S. 330. 62815-36--2 |