centers, and the application of the long and short haul principle never can overcome that natural law, that natural tendency.

The CHAIRMAN. The hour for adjournment has arrived and the committee will be in recess until to-morrow morning at 10.30. Adjourned.

THURSDAY, April 10, 1902.

4

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

STATEMENT OF MR. E. P. BACON-Continued.

Mr. BACON. Mr. Chairman, following up a question which was asked yesterday in regard to the matter of requiring full testimony in cases brought before the Interstate Commerce Commission and appealed to the circuit court to be laid before the Commission, I have taken pains to get a legal opinion upon that question, which I wish to submit. It reads as follows:

The ordinary rule is that when a case is appealed from a lower court no testimony whatever can be taken in the higher court. This is universally true of appeals from the circuit court of the United States to the circuit court of appeals or to the Supreme Court of the United States. It is also true of all admiralty cases. If the record in the court below is used at all in the appellate court, that record can neither be added to nor subtracted from. If testimony has been improperly excluded in the court below, the case is remanded to that court for further hearing.

The provision in this bill as to the taking of additional testimony was drawn in analogy to the practice before the General Appraisers. Whenever a question arises as to the rate of duty to be imposed, the importer can file a protest, and the Board of General Appraisers then takes testimony and passes upon the protest. If the shipper or the Government desires to question the correctness of the decision of the Board of Appraisers, an appeal is taken to the circuit court. If now either party wishes to take additional testimony, this must be taken before one of the appraisers.

I also wish, in confirmation of a statement I made yesterday that there was a case pending in the Supreme Court that has been pending for a period of nine years, to cite the case referred to. It is the case of the United States v. The Missouri Pacific Railway Company, begun in the United States circuit court in 1893. It is still pending in the United States Supreme Court. That was begun nine years ago. It was brought by the Attorney-General upon request of the Interstate Commerce Commission on complaint of Wichita, Kans., shippers. The CHAIRMAN. Do you know anything about the history of that case; do you know who is responsible for that astonishing delay? Mr. BACON. I am not familiar with the details of that case. Mr. MANN. I think that case is not reported by the Commission as a pending case in their last few annual reports.

Mr. BACON. The case was not heard before the Commission. It was carried directly to the circuit court, taken directly into the circuit court, at the request of the complainants, who made their complaint to the Commission, it being the desire of the complainants that it should be tried in the court rather than before the Commission, and, in accordance with the provisions of the interstate-commerce act, the Commission undertook the prosecution of the case through the AttorneyGeneral. What the status to-day is I am unaware.

Mr. MANN. They purport to give a list every year of the civil cases that are pending. Is that one in that list?

Mr. BACON. I could not say whether it was on the list.

Mr. MANN. They reported last year that they had 11 civil cases pending throughout the United States. That is this year; the report is in January.

Mr. BACON. I have a memorandum of two cases that had been eight years in the courts which have been decided. One is the case of the Interstate Commerce Commission v. The East Tennessee, Virginia and Georgia Railway Company et al., begun in the United States circuit court in April, 1893, and decided by the Supreme Court in April, 1901. That is known as the Chattanooga case.

The CHAIRMAN. Are you familiar with the history of that case? Do you know the reason for the delay there?

Mr. BACON. That case, I believe, involved the question of the construction of the fourth section of the law which is commonly termed the "long and short haul" section. There has been a difference of opinion between the Commission and the courts as to the construction of that section, arising from the question as to what constitutes a difference in circumstances and conditions under which, by that section, the Commission is authorized to suspend the operation of the rule. The Commission in this case did not consider that the competition involved was such as to change the circumstances and conditions sufficiently to require the suspension of the operation of that section.

There was one other case before the court at the same time, involving the same question in another court- a United States court-and the two cases were somewhat dependent upon each other, which is a partial reason for the long continuance of that case. Another case which occupied eight years was The United States Interstate Commerce Commission v. The Clyde Steamship Company et al., begun in the United States circuit court in May, 1893, and decided by the United States Supreme Court in 1901, called the Georgia commission case.

I wish also to refer to the illustration which was used yesterday, which seems to be rather a misleading one in relation to the putting into effect of the decision of the Commission before the case has been adjudicated before the courts, the illustration being that it was practically hanging a man and then trying him afterwards. Now, while apparently there is some analogy, that will not bear analysis. The fact is that the defendant in this case is deprived of his liberty while the case is being adjudicated in the same manner that a criminal is deprived of his liberty while his trial is in progress.

Now, I will yield the floor to the representative of the National Hay Association, asking the privilege at a later time to conclude my remarks on the subject.

STATEMENT OF MR. JOHN B. DAISH, OF WASHINGTON, D. C.

Mr. DAISH. Mr. Chairman and gentlemen, I represent, as chairman of a special committee to appear before you, the National Hay Association. This association is an organization of shippers, some 700 in number, resident in the various portions of the United States, with a membership extending from Massachusetts to the Indian Territory and from Virginia to California.

This committee consists of the following members: John B. Daish,

Washington, D. C.; George C. Warren, Saginaw, Mich.; J. W. Sale, Bluffton, Ind.; C. S. Bosh, Fort Wayne, Ind.; Charles England, Baltimore, Md. Owing to business reasons, Mr. England is the only member able to be present on this occasion, although others may appear before you later.

These hay people-and I am one of them, for the reason that I have an interest in a concern in this city which handles hay-have had a peculiar experience under this interstate-commerce law. Before going into that experience I wish to answer, if possible, a couple of questions which were asked on yesterday and the day before with regard to certain matters. If I understand the question correctly asked by one of the gentlemen, it was in this shape: Taking the first ten years of the history of the Interstate Commerce Commission, how many of their decisions dealt with the question of the reasonableness of rates in proportion to the entire number? It is reported, on page 16 of the eleventh annual report, which is the report for 1897, referring to unreasonable and unjust rates, that "of the 135 formal orders made in suits actually heard from the date of its institution until 1897, 68 have prescribed a change in rates for the future," making about one-half of the number of all the cases at that time dealing with unreasonable and unjust rates.

Our experience is now in the state of going on. It is not a past experience, and it was indicated by one of the members yesterday that the committee wanted the actual observation and experience of working under this act. I trust it will not be tedious to review shortly the history of hay as a transportation feature. I do not care to go into it fully at all, but simply enough to give you an outline of what we have been through from 1887 until the present time. In conformity with the act the carriers have put forth what is called a classification; that is, certain articles go first class, or double first class, and others go second class and third class, and so on all the way down to the lowest class, which is the sixth class. From 1887 to 1900, with a short period intervening of about six weeks in 1894, hay was transported at this lowest or sixth class rate, 25 cents per 100 pounds from Chicago to New York.

Shortly prior to January 1, 1900, for the various railroads in the territory south of the Great Lakes and extending from the Mississippi River to the Atlantic Ocean on the east, this committee determined that it was for the best interests-I suppose of the carriers-I do not know-to place hay in the fifth class, and that rate is 30 cents per 100 pounds from Chicago to New York. Not only was a change made at that time in the rate of transportation of hay, but I think also of some 800 other articles.

This was felt to be an injustice. This advance from 25 cents to 30 cents was felt to be an injustice and a discrimination against hay as a shipping commodity. The chairmen of our various committees appeared before the official classification committee and protested. They said: "You are wrong; you will not have hay moved”—but all without avail.

The matter subsequently was taken up with the Interstate Commerce Commission and a petition very like a bill in equity was presented to the Commission and filed on the 6th of last August. Issues were joined and testimony was taken on behalf of the complainants about the middle of November. Testimony for the carriers was given in this city in

December. The case was argued commencing on the 14th of February, and of course the decision in that case is not yet rendered. What I have already stated is practically the history leading up to the present time. I take it that now it becomes reasonable and right that we should speculate on first, what would be our position as complainants in this case were it not for the decisions of the Supreme Court in 1897-what would be our position presuming that we had a decree in our favor at this time and then what would be our position, and all the way along, in the position of carriers under the proposed amendment to this act? Suppose, now, that we have a decree or order in our favor, and that the year instead of being 1902 is 1896. The Commission, in accordance with the statute, orders the several carriers to cease and desist from charging the unlawful rate on hay. The carriers naturally would say it is their side of the case: "The Commission are wrong; hay is not being discriminated against. If we see fit to carry grain from Chicago to New York for 15 cents or 17 cents per hundred pounds, that is our business, and we can carry hay for 25 cents or 30 cents, and that is also our business; and, gentlemen of the Commission, while we respect your views, you are seriously in error, first upon the facts and secondly upon the law; therefore we will see you enforce this."

They retain the rate at 30 cents per 100 pounds on hay between Chicago and New York. The Commission think they are right and they proceed to the circuit court, and the case is entitled "The Interstate Commerce Commission v. The Lake Shore and Michigan Southern and other railroads." The object of proceeding there is to compel in some way, shape, or form obedience to that order. There it lies for such length of time as the counsel can prevail upon the court to stay matters. We all know how that can be done, on plea of illness of counsel, or other reasons can be given.

Now, presume that the ruling of the circuit court is that the Interstate Commerce Commission is right; but right or wrong, it is immaterial for the sake of this illustration. The case goes to the court of appeals and from there to the Supreme Court of the United States, and it is immaterial for this illustration whether the contention of the Interstate Commerce Commission on the petition of the hay association is correct or not. Considerable time has elapsed pending these several appeals and reports. In the meantime hay has been carried, and the freight has been exacted at the rate of 30 cents per 100 pounds from Chicago to New York, and from points east of Chicago it takes a proportionate rate. Of course there is this chance as well, that the carrier may have said, "We were not justified in advancing this rate." Mr. RICHARDSON. Does not the railroad give a bond when it takes that appeal?

Mr. DAISH. No, sir.

Mr. RICHARDSON. To the circuit court?

Mr. DAISH. No, sir; I understand not.

Mr. RICHARDSON. The rule is different there, then, from all other rules in appeals taken to the courts of appeals. requires a bond.

Mr. DAISH. I so understand.

Every one of them

Mr. RICHARDSON. How do they get up there? Do they not give some security for costs?

Mr. DAISH. I think not. They may give a security for costs, but certainly no security to indemnify any shipper on the excess charged.

Now, then, presume that the upper court should determine that we were right in our contentions. Suppose now, and it is possible as I was about to state, that the company had thought the judgment of the Interstate Commerce Commission correct, and that the contention of the original complaint was right. Under those circumstances they would obey the order of the Commission, and hay would be transported at 25 cents per 100 pounds. I am not familiar with statistics showing the number of orders which the carriers have refused to obey. I have heard it stated, however, on fairly good authority, that between 1887 and 1900 there had been issued against carriers 22 formal orders or decrees, and that of those 22 orders but 7 had been obeyed by the railroad companies.

Now, let us transfer the case to another period of time, and instead of considering 1896 consider what might be done now. The carrier knows, as we know, that the Supreme Court of the United States has said that the Interstate Commerce Commission can say to Mr. Railroad: "You have done wrong in the past, but neither we as a Commission nor any other body outside of Congress can prescribe the rate for the future. No court can say anything to you about what rates you shall charge on or after this or any subsequent date. You have taken from the pockets of the people an unjust and unreasonable charge, but we can not prohibit you from doing it in the future, because the Supreme Court of the United States has said that we can only determine what was wrong in the past; and while we strongly recommend to you, and in fact order and decree you, to cease and desist from charging this unreasonable rate, yet we can not compel you to do it."

Well, what would we all do under those circumstances? The father says to his little boy: "Boy, you were wrong in telling that story." The boy tells another one; and I don't know how it is with most boys, but I know that what I got for doing that when I was a child was I got whaled. The Interstate Commerce Commission can say to the carriers, "You are wrong, but we can not whale you. You can keep on and do as you please. I will endeavor to use my best arguments to show you that you are wrong. We have been all through this case, and we have heard testimony for two or three weeks, and we have weighed carefully all the interests involved. We know there is a large stretch of country to be considered and that the amount of the traffic is enormous, and we have weighed all that, and we do not think that the circumstances and conditions to-day justify your charges in this particular case."

But the carrier, or any one of us, would simply say, "If I can get 30 cents I am not going to take 25 cents." It is a business proposition. In fact this entire subject of interstate commerce is more a business proposition, it seems to me, than it is a legal one. I will agree with anyone that there are certain legal features connected with it, certain matters that constitute a law to be considered, but it is a straightforward business proposition, with an eye to the interests not only of the public but to the interests of the carriers.

Mr. RICHARDSON. Will you allow me to interrupt you there for a moment?

Mr. DAISH. Certainly.

Mr. RICHARDSON. According to your theory that you have just been

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