courts to which the appeals have to go. For instance, the defendants questioned my right to bring the complaint. They said that I was not a shipper. I was, in fact, merely bringing the complaint as a citizen of New York who was subjected to very high coal tariff, to very high prices for coal. That point was appealed. Then the defendants declined to produce certain books and papers-contracts-which were essential and important in the case, and they refused to answer questions, and those points were appealed. The CHAIRMAN. Were these appeals taken separately or in one appeal? Mr. HEARST. I think they were taken in one appeal. The CHAIRMAN. Yes. Mr. HEARST. First before the circuit court, Judge Lacombe, of the southern circuit of New York, and he decided in favor of the defendant and against the Commission, and then it was appealed to the Supreme Court, and the Supreme Court upheld the Commission in every point, but, nevertheless, those appeals took altogether about a year's time. The CHAIRMAN. How much time was consumed in the hearings before the Commission? Mr. HEARST. I suppose the rest of the time was consumed in the hearings. The CHAIRMAN. How long was it? Mr. HEARST. About another year. The CHAIRMAN. How long was it after the institution of your proceeding before the Commission put the thing in such shape that it might be appealed? Mr. HEARST. The appeals were taken, I think, after hearings had been going on for several months. I would not say how long, exactly. The total time has been from November, 1902, down to this date, and the final arguments, I believe, are to be made before the Commission on February 7; that is, next month. Mr. RICHARDSON. There was as much time consumed in the delay before the Interstate Commission as there was in the appeals before the higher courts? Mr. HEARST. Just about, I should say; yes, sir. They were about equal, I think. Mr. KYLE. Both of you appealing; both parties appealing the case? Mr. HEARST. In the first case the defendant appealed and in the second case the Interstate Commerce Commission appealed to the Supreme Court. Mr. KYLE. Then there were two separate appeals, each of you having appealed from some decision? Mr. HEARST. Yes, sir. The Interstate Commerce Commission ruled and then appealed from the decision of the circuit court which was wrong. They appealed to the Supreme Court, and the books and papers were produced. Mr. RICHARDSON. Did I understand you as having made any special complaint about the matter of delay, either before the Interstate Commerce Commission or before the appellate court? Mr. HEARST. No, I have not made any complaint about that. In my bill I have tried to provide clauses that would remedy that. Mr. RICHARDSON. By establishing precedents? Mr. HEARST. No, sir; by establishing this Interstate Commerce. Court; by establishing a court that will have a power of review. Mr. RICHARDSON. I see. Mr. HEARST. The coal cases were instituted originally to show that the high price of coal was due originally to the pooling of the railroads, the establishment of a monopoly, and a combination in restraint of trade, and we succeeded in bringing out before the Interstate Commerce Commission those facts, that the railroads interested, the New Jersey Central and the Reading the Reading owns the New Jersey Central--those two roads own about 60 per cent of the unmined anthracite coal, and with the other coal roads owned altogether something over 90 per cent, and that they had adopted various measures to crush out competition. For instance, the Temple Iron Company contracts were one of the things that were refused to be produced, and when they were produced they showed that the independent operators, after the establishment of these high rates, had finally gotten together and decided to build a competing line, and that they got rights of way, bought the steel rails, and at that time, when they began to be threatening, the coal roads stepped in and bought this Temple Iron Company, which had a liberal Pennsylvania charter entitling them to do almost everything, paying for it about $240,000. and Then they have issued stock and bonds amounting to about $15,000,000, and guaranteed interest on the stock, and the payment of interest and principal on the bonds, and with this stock and these bonds they bought up eleven of the collieries which were in this combination, in this plan to build a competing road. These collieries belonged to Simpson and Watkins, and that broke the back of this competition. The railroads did not do it by lowering the rates, but they did it in the way I have described. Now, the point is that the stock and bonds of this Temple Iron Company were guaranteed by the six coal roads, and the presidents of the six coal roads are the directors of the Temple Iron Company, and that they operate the collieries which the Temple Iron Company has bought, jointly. This showed the combination in restraint of trade. Then there were the other contracts the coal purchase contractswhich showed the discrimination. The independent operators through these contracts were allowed 65 per cent of the price of the coal at tide water, and when these contracts were made coal was selling at $4-that is, the domestic sizes of coal-and this made the rate of transportation. about $1.40. It also relieved the operators who went into this contract of the cost of handling the coal, the cost of selling their coal, which I understand is about 15 cents, and it relieved them of the waste, which I understand is about 5 cents on a ton, therefore giving them an advantage over the men who did not make these contracts of about 35 cents a ton. This we considered discrimination, and the result of it of course was to force almost all the independent operators into these coal-purchase contracts. Then, when that was done, and there was practically no competition, the price of coal was put up to $5, where it now is-between $5 and $5.50. The CHAIRMAN. In your investigation there did you become familiar with the value of coal in the bank, the cost of mining, the cost of transporting to the centers, say Philadelphia and New York? In your investigations did you study those subjects? Mr. HEARST. Yes, sir; more or less. I do not remember all the details of this case, especially the figures, prices, cost, and so forth. I would have to refer to memoranda for that. The CHAIRMAN. You could not give us those figures as to the value of the coal in the mines, the cost of mining, the cost of transporting from the mines, and so forth? Mr. HEARST. I do remember the cost of transportation from the fields to New York, which was developed to be not greater than 80 cents; and I remember that the rate is $1.55. So that the profit is about 100 per cent, and the Interstate Commerce Commission had made a futile attempt to lower that rate. The CHAIRMAN. Could you give the committee some idea of the value of the coal in the bank and of the cost of mining it? Mr. HEARST. I can only do it The CHAIRMAN. Just approximately, if you can? Mr. HEARST. I can do it only in this way, that I believe the defense entered a claim which they thought was to their advantage, that after the freight had been estimated at the rates that are published-that is, $1.55-it only left a profit of about 7 cents a ton. Mr. TOWNSEND. How much? Mr. HEARST. Yes, sir. Now, I think that is correct, but I can not recall all these figures without referring to documents. The CHAIRMAN. That was their claim? Mr. HEARST. Yes, sir. The CHAIRMAN. You did not concede that to be true? Mr. HEARST. We are disposed to accept it in a way, because it shows the outrageous character of the rate. They undoubtedly make a great deal of money, and it makes no difference to them, because they own the railroads and the coal mines, and if they fix the rate at such a point that it brings them a profit of only 7 cents a ton the independent operator, who does not own the railroads, but only a mine, is at a very distinct disadvantage, while the railroad operator, who owns both the mines and the railroad, can make his profit out of the railroad. That was their claim, as you say, Mr. Chairman, but I suppose we might be disposed to accept it on account of the deduction to be drawn from it. The CHAIRMAN. According to that estimate, if the selling price of the coal was $5 a ton in the market, the cost of transportation $1.55, and there was only 7 cents of profit to them, then the value of the coal and the charges for mining must be something over $3, according to that claim of theirs. Mr. TOWNSEND. That includes the profit of the dealer? The CHAIRMAN. No; I have included that in the profit of 7 cents. Mr. RYAN. Was that profit of 7 cents independent of the $5 selling price? Mr. HEARST. I presume so. The CHAIRMAN. That was substantially their claim? Mr. HEARST. Yes, sir. The CHAIRMAN. Was that true? Mr. HEARST. I think not. But I would hesitate to go into the figures of this case very definitely without something to refer to, because figures are elusive things. The CHAIRMAN. I would like to have a little approximate idea of how much the public are being robbed. Mr. HEARST. I did not know that this case was to be investigated except as it related to the Interstate Commerce Commission, so that I did not fortify myself with these figures; but I will be glad to do it, if it is required. The CHAIRMAN. If you will furnish us with a statement on these points we would be glad of it. Mr. HEARST. I shall be delighted to do it. But what I wanted to bring out here were the facts as to the contracts that were called for, and their relevancy, and the difficulty that we had in securing them; and I wanted to say, further, that after all this delay the finding of the Interstate Commerce Commission will not be final, will not really be effective; it will only be a sort of recommendation, and in order to sustain it they will have to go into court and try the matter all over again, first before a circuit court, and if it is appealed, before the United States court. And after all those proceedings have been gone through, all they will have succeeded in establishing is that the present rate is unreasonable, and the road may go to work and put into effect another rate which is somewhat less, but almost equally unreasonable, and the whole thing will have to be taken up from the beginning again. That is, at least Mr. TOWNSEND. What is the number of your bill? Mr. HEARST. No. 13778. Mr. ADAMSON. I do not know whether you brought it out, or have stated it, but I would like to know whether you employed counsel in your case, or whether you relied upon the Government's counsel entirely? Mr. HEARST. I employed counsel in my case. Now, the object of my bill is to obtain expedition and effectiveness in action. Its object is to give the Interstate Commerce Commission the power to fix a reasonable rate, and not merely to say, not merely to determine or succeed in bringing out that a certain rate is unreasonable; and the establishment of a court is in the interest of promptness, and other interests, too, to secure a more consecutive line of opinion, for instance, but chiefly to secure a prompt enforcement, by writ, of the orders of the Commission, and to enable the Commission to speedily get at the facts, and to effectively provide a remedy. The first section deals with that: Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That hereafter when the Interstate Commerce Commission shall, in any case pending before it under the act to regulate commerce, approved February fourth, eighteen hundred and eighty-seven, as amended or supplemented by other acts of Congress, decide that a rate for the transportation of freight or passengers is unreasonable or unjust it shall be the duty of the Commission, and it is hereby authorized and empowered, to fix a rate in lieu of the rate it has found unreasonable and unjust. Now, I understand that the constitutionality of that, or of a similar section in another bill, has been questioned before the committee, and while I do not pretend to be a lawyer at all, I have endeavored to deal as a layman with that point. Mr. MANN. Does that provision relate to the Interstate Commerce Commission or to the court? Mr. HEARST. It is to the Commission. Mr. RICHARDSON. What is your authority that you propose for this Interstate Commerce court; it is final, is it not-you can not go beyond that except by certiorari to the Supreme Court? Mr. HEARST. Yes. There is no appeal from it except where grave constitutional questions are involved. The Interstate Commerce Commission, probably under section 1, has an opportunity to move of its own motion, and that has seemed to be in accordance with the expression of the Supreme Court, in my case, that the shipper's complaint, or even the citizen's complaint, was not necessary; but it was in the power of the Commission, and it was the duty of the Commission, to investigate unjust and unreasonable conditions generally. I give them simply the power, then, in this: When they have found the rate unreasonable, to fix a reasonable rate; and I can refer the committee here to various decisions of the Supreme Court in which these points have been decided the maximum-rate case and the Reagan case, for instance. The CHAIRMAN. I do not think, Mr. Hearst, that that proposition troubles any member of the committee; at least I have not heard such expressions. The trouble, whatever there is of that character, is with reference to giving the court the power-a judicial body the powerto fix the rates. Mr. HEARST. Yes. Mr. MANN. For the future. The CHAIRMAN. For the future. Mr. RICHARDSON. Conferring any legislative power upon the Interstate Commerce Commission. Mr. HEARST. Legislative power? Mr. RICHARDSON. Yes, sir; delegating it, a power of Congress. The CHAIRMAN. I would be glad to have that brief upon the record upon that other point. Mr. HEARST. It is not really a brief. What I have here is just with regard to the right of Congress to delegate its legislative powers, and the references are made to the maximum-rate case, to the effect that Congress itself might prescribe rates, and to the Reagan case, to the effect that the power to fix rates is not within the absolute discretion of the carriers, but is subject to legislative control. The legislature has the power to fix rates, and this power can be delegated. According to the maximum-rate case Congress might itself prescribe the rates, or it might commit to some subordinate tribunal this duty. Mr. SHACKLEFORD. Could it confer the power upon the judiciary? Mr. HEARST. It is conferring it upon the Mr. LAMAR. Is it seriously contended before this committee that Congress can not delegate its power to fix rates to a quasi legislative body or a legislative body like the board of commissioners? Mr. RICHARDSON. I do not know if I understand this correctly, but the question is, as I understand, Can Congress delegate its legislative power to a commission that is judicial? Mr. LAMAR. Is that a general question is dispute among lawyers? The CHAIRMAN. No; the question, as I understand it, that involves difficulty is, Can Congress impose upon a judicial body the duty of fixing a future rate? Mr. RICHARDSON. Then the further question is, if that is done, then a higher court could not revise that legislative authority. For instance, suppose that the right is given to this Interstate court, or as Mr. Hearst calls it-how do you name it? |