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the instruction to fix a rate lower or higher. Do you think they should have that power?

Mr. Hearst. You mean to positively direct the Commission what rate to fix?

The CHAIRMAN. Well, in their judgment.

Mr. HEARST. Of course their opinion would naturally be that. In giving their opinion they would give their reasons for it, and that opinion would guide the Commission in fixing the subsequent rate. In other words, it would endeavor to fix the rate in accordance with the decision of the court.

The CHAIRMAN. Then that power to remand would substantially give to them the power of determining what the action of the Commission should be as is usually the case in the case of a court of equity in remanding a case, or in remanding an equity case for further proceeding-of indicating what should be the line of conduct.

Mr. HEARST. Yes, sir; it would certainly tell them what they could not do, and that would enlighten them as to what they could do, and the opinion of the court in details would enlighten them, to a considerable extent, and perhaps altogether as to what they could do; as to what rates would pass the censorship of the court.

The CHAIRMAN. The thing that I want particularly to get your opinion about is as to whether this Congress can require å judicial body to say to the Commission what line of conduct they are to pursue in case the cause is remanded to them.

Mr. HEARST. That is the whole point at issue, the whole point upon which I have expressed the opinion that I do not think they can go to the extent of fixing the rate definitely themselves.

Mr. ADAMSON. If they can not do it, can they help do it?

Mr. HEARST. Yes, sir; because their opinion materially assists the Commission in fixing it.

Mr. ADAMSON. If they can not do it, what right have they to tell another body to do it?

Mr. HEARST. They are not telling another body to do it; they are telling another body what can not get through that court.

Mr. ADAMSON. In other words, to pass on their future action in advance.

Mr. HEARST. That is what every court has the right to do; they have the right to reverse

Mr. ADAMSON. A lower court? Mr. HEARST. Yes, sir. Mr. RICHARDSON. Mr. Adamson, your question goes to the point of whether the Supreme Court of the United States, the court of last resort

Mr. ADAMSON. I have never heard anybody deny that the upper court could give instructions to the lower court whose judgments are sent to it.

Mr. LAMAR. The courts can challenge the reasonable rate, and declare that the legislative power can not confiscate a railroad's property. Mr. ADAMSON. This is a distinct court, and it is a court that you

SON say can not fix a rate, and yet you say, though it can not do it, it can tell another body how to do it.

Mr. LAMAR. It can not legislate, but it can declare under its powers

The CHAIRMAN. That is what I want to know, can we require them to declare?

Mr. LAMAR. I should say not. The Congress of the United States, the legislative body, can not indirectly make the Constitution of the United States different from what it has been fixed. Within their constitutional functions they can adjudicate questions of property or judicial rights. They can find questions of fact within their functions.

Mr. STEVENS. Then it will be necessary for them to adjudicate what is the fact in a particular case.

Mr. LAMAR. They can adjudicate what is a reasonable rate and declare whether it should exist.

Mr. HEARST. I was reading from the first paragraph of my bill. Section 6 enumerates orders that may be issued by the Commission.

Section 6 is as follows: That when in any investigation made by the Interstate Commerce Commission it shall be made to appear to the satisfaction of the Commission that anything has been done or omitted to be done by any common carrier, respondent or defendant, in such proceeding in violation of the provisions of the act to regulate commerce, approved February fourth, eighteen hundred and eighty-seven, or any act amendatory thereof or supplemental thereto, or of the provisions of this act, it shall be the duty of the said Commission forth with to cause a copy of its report in respect thereto to be delivered to such common carrier, together with an order or orders directing such common carrier, its officers and agents, and any receiver or trustee of its property, to wholly cease and desist from such violation, and to establish, put into effect, and maintain such individual rate, fare, charge, relation of rates, fares, or charges, joint rate, fare or charge, and division thereof, classification of freight articles involved in the proceeding through and continuous carriage over connecting lines or roads, including intersecting switches or connections, and regulations concerning transportation, including the furnishing and apportionment of cars, the provision of other facilities connected with or incidental to transportation, and the receiving, forwarding, and delivery of traffic, as in the judgment of said Commission may be necessary to prevent the continuance in any degree of such violation. That whenever any common carrier, gubject to the provisions of this act, shall fail or refuse after reasonable notice to furnish cars to shippers for the transportation of freight as interstate commerce, or to forward and deliver such freight at destination within a reasonable time, such failure or refusal shall be deemed to constitute unjust discrimination and undue and unreasonable prejudice and disadvantage, and in any case or proceeding pending before the Commission or any circuit or district court of the United States based upon such failure or refusal on the part of any such common carrier, proof that, in the furnishing of cars or forwarding or delivery of its traffic, other shippers have been preferred shall not be required.

The CHAIRMAN. You have passed over section 2?

Mr. HEARST. Yes, sir; because I was proceeding primarily with the powers given to the Interstate Commerce Commission, then passing to the character of the orders that they may issue, and then coming to section 7, which tells how the above-described orders shall become effective. Section 8 deals with “The Court of Interstate Commerce.”

The CHAIRMAN. I would like to ask you if it was intended by the language of section 2 to bring ocean carrying within the purview of the interstate commerce act?

Mr. HEARST. The language there is, “and also to such transportation over any part water and part rail route used for through shipment or through carriage.” Yes, sir; I should think that covers coast transportation

The CHAIRMAN. By water.

Mr. HEARST. This is designed to bring under the action of the Commission the independent water lines that are engaged in forwarding interstate commerce, and which are not under the provisions of the

present act, I believe, unless they are owned by one of the railroads which is engaged in interstate commerce. It is practically what Mr. Spencer, I think, said was desirable, a day or two ago.

The CHAIRMAN. Do not the provisions of that section require the foreign vessel engaged in interstate commerce to file a schedule of tariffs, and would the joint tariffs between a railway and such a vessel have to be filed ?

Mr. HEARST. I had not considered that particular relation of it. I had considered it particularly in regard to lesser water lines.

The CHAIRMAN. Yes; the lakes and rivers? Mr. HEARST. Yes, sir. Section 3 reads: Sec. 3. That when the rate fixed by the Commission is a joint rate and the carriers parties thereto fail to agree upon the apportionment thereof among themselves within twenty days after notice of such order, the Commission may issue a supplemental order fixing the portion of such joint rate to be received by each carrier party thereto.

That seems to be necessary in order to carry out the first order of the Commission.

Mr. SHACKLEFORD. Does that not apply simply where the rate is part rail and part water; is not that the limit to which that is intended to go?

Mr. HEARST. That is the limit that I considered.

Mr. RICHARDSON. Does not your language there, “through shipment,” indicate that very thing—that it does apply to this country?

Mr. HEARST. This country, necessarily.

Mr. RICHARDSON. You do not intend it to apply to any water route except to a route that is a continuous one-part water and part rail?

Mr. HEARST. That is my view.

Mr. Mann. Would that apply to the shipment of wheat or corn from New York to Liverpool?

Mr. SHACKLEFORD. That is foreign commerce and not interstate commerce. Would that not be foreign commerce?

Mr. HEARST. If the Interstate Commerce Commission were given power to regulate that, it might, but it has not the power.

Mr. Mann. The Supreme Court has decided that the present law does not cover such a case as that.

Mr. HEARST. I should think

Mr. Mann. It has always seemed to me that it might properly cover a case of that kind, and I have wondered whether your bill provided that it should or not.

Mr. HEARST. Section 4 reads: Sec. 4. That it shall not be lawful for any common carrier subject to any of said acts, or any company or person acting for or in the stead of such common carrier, to allvance, reduce, or cancel any individual or joint rate, fare, or charge now or hereafter in force over the route or line of such common carrier unless or until notice thereof, plainly showing the change intended to be made in such rate, fare, or charge, and the date when the same shall take effect, shall have been filed with the Interstate Commerce Commission and posted in all depots or stations where passengers or freight are received for transportation under such rate, fare, or charge, for at least thirty days prior to the date when such change is to become effective.

That is simply a modification of existing laws which require that if a rate is to be raised ten days' notice shall be given and filed, and if a rate is to be lowered three days' notice shall be given. That increases the time to 30 days in the interest of the shipper, believing that the

third provision gives opportunity for discriminating rates. Section 4 continues:

Provided, however, That said Commission may, for good cause shown, upon special application, allow a particular rate, fare, or charge to be changed upon shorter notice published and filed as aforesaid. No joint rate, fare, or charge shall become effective until all carriers named as parties thereto shall have concurred therein by signing the rate schedule or filing general authorization or specific notice of concurrence with the Commission.

I think that this is generally in effect now, at least by agreement; but I have made it a part of this bill in order that no railroad shall post a rate and lead a shipper to ship his goods over connecting roads, only to find out that the rate is not concurred in by the other roads.

Mr. Mann. Is there anything in your bill, in that connection, that will prevent putting into operation what they call “midnight rates?”

Mr. HEARST. What is a midnight rate? I am not familiar with that.

Mr. Mann. Then I will not go any further on that. That is one method of evading rates.

Mr. RICHARDSON. Known to Chicago? [Laughter.]
Mr. SHACKLEFORD. Is that practiced to any extent in the West?

Mr. Mann. It is practiced wherever they have a cutthroat road, and it is practiced very extensively in various parts of the country, Í believe, so they say.

Mr. ÍIEARST (continuing reading): and any common carrier enforcing any schedule or joint rates, fares, or charges which shall not have been concurred in by all carriers parties thereto, or any schedule of rates, fares, or charges which shall not have been published and filed as required by this section, shall be subject to a forfeiture of one hundred dollars for each day such unlawful tariff shall be published or enforced. The said Commission may prescribe the form, contents, and arrangement of all schedules of rates, fares, and charges, and it shall be the duty of said Commission to make orders from time to time, as may be practicable, with a view of securing uniformity in freight classification and the use of rate schedules containing concise and easily understood provisions and regulations.

These provisions are all merely designed to simplify and make the schedules intelligible, because I understand they are now only to be interpreted by an expert, and to secure business simplicity and system as far as may be for the convenience of shippers, and in the classification of rates. Shall I call attention to some of these other points?

The CHAIRMAN. Certainly. That is what we desire you to do.
Mr. HEARST. I see that it is getting pretty late, Mr. Chairman.
The CHAIRMAN. You will not be able to get through to-day?
Mr. HEARST. I am afraid not.

The CHAIRMAN. We will have to adjourn at 12 o'clock, and if you will suspend now and resume to-morrow morning at half-past 10, we will be glad.

Mr. HEARST. Very well.

(Thereupon, at 12 o'clock m., the committee adjourned until to-morrow, Tuesday, January 17, 1905, at 10.30 o'clock a. m.)

TUESDAY January 17, 1905. The committee met at 10.30 o'clock a. m., Hon. William P. Hepburn in the chair.

STATEMENT OF MR. G. WALDO SMITH. Mr. Smith. I would like to present the views expressed in a report to the New York Board of Trade and Transportation.

The CHAIRMAN. How long would this take you?
Mr. SMITH. I think it will take only about five or eight minutes.
The CHAIRMAN. Proceed.
Mr. Smith read the report referred to, as follows:




New York, December 28, 1904. To the New York Board of Trade and Transportation.

GENTLEMEN: Your committee on railway transportation on the 27th of January last submitted to you a report giving reasons why you should oppose the QuarlesCooper bill amending the interstate-commerce law. That report you adopted unanimously. We now have the honor to submit a further report in support of your action.

The more we have studied the evils and abuses of interstate commerce, the firmer are we of the opinion that the Quarles-Cooper bill will not in any desirable way add to the effectiveness of the existing lawful remedy.

The delay, incident to the enforcement of existing law, was one of its chief weaknesses, but that condition has been in a large degree remedied since the passage of the Elkins law February 19, 1903.

That the Quarles-Cooper bill would make no improvement in expediting the trial of complaints is evidenced by the criticism of its provisions made by Hon. John D. Kernan in his address before the interstate-commerce law convention held in St. Louis last October. Mr. Kernan was urging the importance of an amendment to the bill which was designed to hasten the taking of additional testimony if required by the courts, and his conception of what the experience would be under the

QuarlesCooper bill without his amendment is indicated by his remark, as follows: Mr. Kernan said:

"After a shipper, whose complaint is filed in his youth, dies of old age the disposition of his case is of no use to his business."

The amendment proposed by Mr. Kernan was suggested to Mr. E. P. Bacon in these rooms last year and he, after consultation with his counsel, rejected it as being unconstitutional, and the bill in this respect remains hopelessly defective.

The greatest evils now complained of are those growing out of the private car line, private terminal-track and side-track systems. It is not claimed by its supporters, and can not be demonstrated, that the Quarles-Cooper bill will in the slightest degree affect these abuses.

The private car companies deny that they are under the provisions of the interstatecommerce law, and the Interstate Commerce Commission has not determined their status, neither have the courts adjudged them to be subject to such law.

The language of the Elkins law is as follows:

"And it shall be unlawful for any person, persons, or corporation to offer, grant, or give or to solicit, accept, or receive any rebate, concession, or discrimination in respect to the transportation of any property in interstate or foreign commerce by any common carrier subject to said act to regulate commerce and the acts amendatory thereto whereby any such property shall by any device whatever be transported at a less rate than that named in the tariffs published and filed by such carrier, as is required by said act to regulate commerce and the acts amendatory thereto, or whereby any other advantage is given or discrimination is practiced.”

This would seem to warrant a belief that it is sufficient to reach such devices. If it is not so, it should be made so. These private car-line, private terminal-track and side-track systems are devices by which, among other things accomplished, the grossest discriminations are made and rebates given. The method of evading the law, if effective to that end, is very simple. The shipper pays his freight to the railroad company. The charge so paid is the lawful tariff rate plus the regular charge for the

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