provisions on the subject as the Federal Constitution, allowing State railroad commissions to make and fix railway rates for such States, which said rates were to be operative until set aside by the courts, have been upheld as valid and constitutional by the United States Supreme Court. (See Pensacola & A. R. Co. v. State (Fla.), 3 L. R. A., 661, with extensive notes to that case and notes to Winchester & L. Turnp. Road Co. v. Croxton (Ky.), 33 L. R. A., 177.)

This Federal Commission has assigned to it the duties and performs for the United States in respect to that interstate commerce committed by the Constitution to the exclusive care and jurisdiction of Congress the same functions which State commissioners exercise in respect to local or purely internal commerce over which the State appointing them have exclusive control. Their validity in their respective spheres of operation stands upon the same footing. The validity of State commissions invested with powers as ample and large as those conferred upon the Federal Commission has not been successfully questioned when limited to that local or internal commerce over which the States have exclusive jurisdiction; and no valid reason is seen for doubting or questioning the authority of Congress, under its sovereign and exclusive power to regulate commerce among the several States, to create like commissions for the purpose of supervising, investigating, and reporting upon matters or complaints connected with or growing out of interstate commerce. What one sovereign may do in respect to matters within its exclusive control the other may certainly do in respect to matters over which it has exclusive authority. (Kentucky & I. Bridge Co. v. Louisville & N. R. Co., 37 Fed. Rep., 567; 2 Inters. Com. Rep., 380; 2. L. R. A., 289.)

*

The power granted to Congress to regulate commerce is necessarily exclusive whenever the subjects of it are national or admit only of one uniform system or plan of regulation throughout the country. * * In the matter of interstate commerce the United States are but one country, and are and must be subject to one system of regulation and not to a multitude of systems. (Robbins v. Shelby County Taxing Dist., 120 U. S., 489; 30 L. ed., 694; 1 Inters. Com. Rep., 45. Stoutenburgh v. Hennick, 129 U. S., 141; 32 L. ed., 637.)

Congress may, under certain conditions, reduce the rates of fare on the Union Pacific Railroad, if unreasonable, and fix and establish the same by law. (12 Stat. L., 497, chap. 120, sec. 18.) This statute is discussed by Mr. Justice Brewer in Ames v. Union P. R. Co., 64 Fed Rep., 165; 4 Inters. Com. Rep., 835, and held not to conclude the State of Nebraska from fixing rates until Congress takes action.

This act (of Colorado) was intended to apply to intrastate traffic the same wholesome rules and regulations which Congress two years thereafter applied to commerce between the States. (Union P. R. Co. v. Goodridge, 149 U. S., 680; 37 L. ed., 896.) The Interstate Commerce Commission is an administrative board, and the courts are only to be resorted to when the Commission prefers to enforce the provisions of the statute by a direct proceeding in the court, or when the orders of the Commission have been disregarded. (Interstate Commerce Commission v. Cincinnati, N. O. & T. P. R. Co., 162 U. S., 184; 40 L. ed., 935; 5 Inters. Com. Rep., 391.)

The entire commerce of the United States, foreign and interstate, is subject to the provisions of the act of Congress to regulate commerce. (Texas & P. R. Co. v. Interstate Commerce Commission, 162 U. S., 197; 40 L. ed., 940; 5 Inters. Com. Rep., 405.) Upon the power of legislatures to fix tolls, rates, or prices, see note to case of Winchester & L. Turnp. Road Co. v. Croxton (Ky.), 33 L. R. A., 177.

A statute imposing a penalty for charging more than just and reasonable compensation for the services of a carrier, without fixing any standard to determine what is just and reasonable, thus leaving the criminality of the carrier's act to depend on the jury's view of the reasonableness of a rate charged, is in violation of the constitutional provision against taking property without due process of law. (Louisville & N. R. Co. v. Com., 99 Ky., 132; 33 L. R. A., 209.)

Penalties can not be thus inflicted at the discretion of a jury. * * * The legis lature can not delegate this power to a jury. If it can declare it a criminal act for a railroad corporation to take more than a "fair and just return" on its investments, it must, in order to maintain the validity of the law, define with reasonable certainty what would constitute such "fair and just return." (Louisville & N. R. Co. v. Railroad Commission, 19 Fed. Rep., 679.)

The Supreme Court of the United States, in Railroad Commission Cases, 116 U. S., 336, sub nom. Stone v. Farmers' Loan & T. Co., 29 L. ed., 646, refers to the lastnamed case and substantially approves it.

Although a statute has been held to be unconstitutional which left it to the jury to determine whether or not a charge was excessive and unreasonable in order to ascertain whether a penalty is recoverable, yet, where the action is merely for recovery of the illegal excess over reasonable rates, this is a question which is a proper one for a jury. (8 Am. & Eng. Ency. of Law, 935.)

The Iowa railroad commission act was attacked for uncertainty on the ground that

it did not prescribe what should constitute a reasonable rate; but as the statute declared that the rate fixed by the commission should be prima facie evidence that it was reasonable, although the accused could show in defense that it was not reasonable, the supreme court of the State held that the statute was sufficiently definite, since the rate was fixed, although it was subject to attack in the courts. To the claim that the commissioners' rate would not secure the accused from conviction if it was excessive, the court declared that the State was precluded from denying that the commissioners' rate was a reasonable one. (Burlington, C. R. & N. R. Co. v. Dey, 82 Iowa, 312; 3 Inters. Com. Rep., 584; 12 L. R. A., 436.)

The same decision in substance was made on this question by Judge Brewer, then of the United States circuit court, in the case of Chicago & N. W. R. Co. v. Dey, 35 Fed. Rep., 866; 2 Inters. Com. Rep., 325; 1 L. R. A., 744.

The Illinois act, providing that a charge by a railroad company of more than reasonable rates shall constitute extortion, is held to be sufficiently definite when construed with another section which provides that the railroad commission shall make a schedule of reasonable maximum rates. Chicago, B. & Q. R. Co. v. People, 77 Ill., 443.

And the validity of this provision of the Illinois statute has been further established by the Illinois supreme court. See Chicago, B. & Q. R. Co. v. Jones, 149 Ill., 361; 4 Inters. Com. Rep., 683; 24 L. R. A., 141; Stone v. Farmers' Loan & T. Co., 116 U. S., 307; 29 L. ed., 636, deciding the same way the Mississippi statute.

The Georgia statute is not violated unless the rates charged exceed those fixed by the Commission. Sorrell v. Central R. Co., 75 Ga., 509.

But in order to constitute a crime the act must be one which the party is able to know in advance whether it is criminal or not. The criminality of an act can not depend upon whether a jury may think it reasonable or unreasonable. Tozer v. United States, 52 Fed. Rep., 917; 4 Inters. Com. Rep., 245.

An inquiry whether rates of carriers are reasonable or not is a judicial act; but to prescribe rates for the future is a legislative act. That Congress has transferred to any administrative body the power to prescribe a tariff of rates for carriage by a common carrier is not to be presumed or implied from any doubtful and uncertain language. If Congress had intended to grant such a power to the Interstate Commerce Commission, it can not be doubted that it would have used language open to no misconstruction, but clear and direct. Interstate Commerce Commission v. Cincinnati, N. O. & T. P. R. Co., 167 U. S., 479; 42 L. ed., 243.

In the case of Munn v. Illinois, 94 U. S., 113, 24 L. ed., 77, the Supreme Court of the United States, after a thorough review of the American and English authorities, has laid down the following fundamental principles governing public carriers and other quasi-public institutions:

1. Under the powers inherent in every sovereignty, a government may regulate the conduct of its citizens toward each other, and, when necessary for the public good, the manner in which each shall use his own property.

2. It has, in the exercise of these powers, been customary in England from time immemorial, and in this country from the first colonization, to regulate ferries, common carriers, hackmen, bakers, millers, wharfingers, auctioneers, innkeepers, and many other matters of like quality, and in so doing to fix a maximum charge to be made for services rendered, accommodations furnished, and articles sold.

3. The fourteenth amendment to the United States Constitution does not in any wise amend the law in this particular.

4. When the owner of property devotes it to a use in which the public has an interest, he in effect grants to the public an interest in such use, and must to the extent of that interest submit to be controlled by the public.

5. The limitation by legislative enactment of the rate of charges for services rendered in an employment of a public nature, or for the use of property in which the public has an interest, establishes no new principle in the law, but only gives a new effect to an old one.

Thus the highest court has permanently established the broad principle that the public have the right to regulate charges in all enterprises affected with a public use, To this doctrine all the courts have steadfastly adhered. In this leading case it was also held that the courts had no right to interfere with the rates fixed by the lawmaking power. This doctrine, however, has been since somewhat qualified in the case of Reagan v. Farmers' Loan & T. Co., 154 U. S., 412, 38 L. ed., 1028; 4 Inters. Com. Rep., 1028, and other cases there cited, where it is held that when rates are confiscatory the courts may so declare and relegate the matter back to the lawmaking power for new rates, by which a reasonable profit is left to the carrier. But the principle that the legislative power, either directly or indirectly through a commission, can fix rates of freight and passenger traffic within this constitutional limitation, has been uniformly upheld in all the decisions of the United States Supreme Court upon this subject.

MONDAY, April 14, 1902.

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

The CHAIRMAN. Gentlemen, the committee is ready to proceed.

STATEMENT OF MR. R. S. LYON.

Mr. LYON. Mr. Chairman, I represent the Chicago Board of Trade, in part. Some gentlemen here will follow me who also represent that body. What I have to say will not take up very much of your time. The CHAIRMAN. Let me ask you: A number of gentlemen have said that they represent this body and that body and the other. Please explain to the committee how, as a representative, you come here. Of course you have a perfect right to appear on your own personal account, and we are very glad to see you, but when a man comes in a representative way it is always desirable to know how anxious those whom he represents were to have him come.

Mr. LYON. Perhaps my credentials here would do if I should read them.

The CHAIRMAN. That will do.

(Mr. Lyon here read a letter from Mr. Warren, the president of the Board of Trade of Chicago, notifying him of his appointment to appear before the committees of Congress in regard to the pending bill.)

The CHAIRMAN. That was the action

Mr. LYON. Of the board of directors.

The CHAIRMAN. Yes.

Mr. LYON. Of course the board of directors have only powers to take action by the particular committees

The CHAIRMAN. What I want to get at is, I want to know how far there is a sentiment in that board of trade that authoritatively has asked gentlemen to come here, because that indicates the sentiment. A complimentary request from the president of the board asking some gentleman to appear here who is traveling in this part of the country does not mean much, but if the board of trade, by their own action, had a meeting and thought this a matter of sufficient importance to have a gentleman come here specially to represent them, that means one thing

Mr. LYON. Without flattering myself, Mr. Chairman, and without any egotism, I would say that in 1899 I was the president of that organization, and consequently I know a little something of the powers delegated to the directors. The board of directors are elected from that board of trade, 1,700 in number, to regulate its affairs. We have our committees, whose special duty it is to deal with these subjects, governing particular subjects that come from outside matters up to this board of directors. Those matters are never referred to the board as a whole, consequently the directors act in everything for the board. Now, this board indorse, I believe-although I am not a member now, I know they indorse--the Corliss bill, and they are anxious to have those recommendations carried out, and they have asked Mr. Chadwick to come here, and myself, and he will follow me after a while, and perhaps go into it a little more than I.

The CHAIRMAN. When was this legislation as embodied in the Corliss bill considered by the board of trade of Chicago?

Mr. LYON. By the directors of the board of trade?

The CHAIRMAN. No; by the board of trade.

Mr. LYON. It never was.

The CHAIRMAN. It never was?

Mr. LYON. No, sir. As I explained it awhile ago, the board of trade as a corporate body delegates to the directors its powers to do anything in a matter. Of course the individual members of the board, some 1,800, may have divergent views.

The CHAIRMAN. When was the subject considered by the board by directors?

Mr. LYON. I think some time since the first of January. I am not positive, but I think that is it. It is recently, since the bill has been before you.

The CHAIRMAN. Were the provisions of the bill discussed by the directory?

Mr. LYON. I think so; I was not there.

The CHAIRMAN. They had copies of the bill?

Mr. LYON. Yes, sir; Mr. Barry corrects me. He says that there was a copy of a resolution adopted by the board of directors filed with this committee.

The CHAIRMAN. Very well, I do not want to be unduly inquisitive, but I simply want to know how far this subject had been a matter of discussion, and how far there was a public opinion on the part of the board of trade of Chicago upon the subject.

Mr. LYON. Yes, sir.

The CHAIRMAN. And whether that had been

Mr. LYON. Possibly I can, in what I am going to say to you here, go into that sufficiently. Mr. Chadwick, who is to follow me, is a director, and may answer you more fully. I have been out of office

for two years.

It would seem possibly a little superfluous to one at this day to appear before a committee of Congress and show that the interstatecommerce law had been violated or to bring any evidence to that end. You have had abundant evidence and are surfeited, no doubt, with facts showing this to be the case; consequently I will not attempt to take up any of your valuable time to that end. Representing, as I have the honor to at this time, the great grain and shipping trade of the Board of Trade of the city of Chicago, I come before you to urge some change in the interstate-commerce law that will give us equal, stable, and uniform rates to and from all points.

The CHAIRMAN. Let me interrupt you there just a moment. If these interruptions are embarrassing to you, however

Mr. LYON. As far as I can answer you, I will be glad to do so. I am not a lawyer at all.

The CHAIRMAN. You have spoken of the grain shippers of Chicago? Mr. LYON. Yes.

The CHAIRMAN. Now, we have heard from many gentlemen here who represent the flour interests

Mr. LYON. Yes, sir.

The CHAIRMAN (continuing). Who complain of you gentlemen shipping grain, and especially the shippers of wheat, of the very unusual facilities that you gentlemen have

Mr. LYON. As I proceed you will perceive that I am a very small item. I am what is called a small shipper.

The CHAIRMAN. But you are conversant with the subject somewhat? Mr. LYON. Yes, sir; I am, a little.

The CHAIRMAN. Now, if you will explain to us how this discrepancy of opinion arises between these gentlemen who are making complaint of the undue advantages that you have

Mr. LYON. You are speaking of the millers?

The CHAIRMAN. Of the millers.

Mr. LYON. That I can not say. I am absolutely powerless to do that. I can not do that. You have had gentlemen here who can explain that to you. I am not a miller, but simply a small shipper. The CHAIRMAN. It is from the fact that you are not a miller, but a shipper of grain, that I have come to you for information.

Mr. LYON. I do not know as to that. The Chicago Board of Trade, handling as it does the greatest bulk of grain of any market in the world, reaching out in all directions, West, Northwest, and Southwest, to bring this grain to market, and in turn supplying the markets of the world, both domestic and foreign, must of necessity be the barometer of prices and feel any and all outside influences that affect its prices. So that any deviation from tariff rates, known always, whether made in the country west, tributary to Chicago, whereby grain is diverted from its natural channel, or even by our own members, competitors with one another, is immediately felt and the market price of commodities dealt in on the Chicago market is influenced to a greater or less degree.

The CHAIRMAN. May I interrupt you again? What do you mean by grain being diverted from its natural channels?

Mr. LYON. Well, grain that is naturally-I will assume that-naturally tributary to Chicago, by reason of its lake advantages, is bought by Eastern parties, or perhaps parties on our own board, which is not sent through Chicago, but which reaches its destination by being sent around to outside junction points east of the river, or perhaps to St. Louis; and that we feel very much in that way.

The CHAIRMAN. Give us an illustration, if you please, of that diversion; some instance of a diversion from a natural channel.

Mr. LYON. Well, we will call the natural channel, for instance, Chicago. Now, our merchants in Chicago know where all this grain in Iowa lies, and in Nebraska, and in the Northwest and Southwest, and possibly through capital or some way else control it.

The CHAIRMAN. Give us an illustration of where it goes at times. Mr. LYON. It goes to the seaboard.

The CHAIRMAN. By what routes?

Mr. LYON. Routes that are around Chicago, by belt lines, by junction points that do not bring it to Chicago at all.

The CHAIRMAN. That is, that do not bring it to Chicago elevators? Mr. LYON. That does not bring it to Chicago. Yes; to Chicago elevators, if you choose to use that expression. Chicago elevators are where they take the lake route. But the first thing we know somebody is buying a lot of grain and taking it off to Baltimore and New York by a junction route and we do not get the benefit of that. Mr. CORLISS. What harm does this diversion do?

Mr. LYON. By its going by a route different from that we have. For instance, the grain might be worth more in Chicago. Two and