the courts, to deal with as to whether that rate was a reasonable or an unreasonable one, but you have got the additional question then of expediency to deal with, in view of the altered situation. It may have been perfectly agreeable to everybody almost, except, probably, one complainant, to pay that. They have been convinced by that time that the experiment, if you may so call it, of putting in that rate did not bring in expected results; that it is a disappointment, and yet the very fact that it is there, that the commerce of that section of the country is being carried on in respect to that condition of affairs as thus changed, will be a material reason why that rate could not be put up again; and there is an irreparable loss on a rate which the courts, I am assuming, would finally adjudge (as it has in most of the cases that have come up) was not an unreasonable rate. And yet somebody whose judgment was brought to bear upon it, other than the carrier that controlled that rate, has put it down, and the sum total of the result is that the carrier permanently loses that much revenue, when the commerce of the country would have gone on just as smoothly, just as successfully, to the same volume that it did before. Lastly, with respect to the objection that it would be conferring anomalous powers upon one body. I might elaborate that at length, but in view of the limited time I shall say very little about it, leaving it, probably for able counsel to follow me hereafter.

The Interstate Commerce Commission, under the present law, is an investigating and a prosecuting body, with administrative powers as well. They entertain claims that are presented to them. They have power, and it is their duty, in certain cases, to institute proceedings against the carriers with reference to their rates or their practices, or their management in general.

the

Now, it is proposed to confer by this bill the right for the Commission, upon hearing and complaint and not upon their own initiative, I quite recognize that to hear and determine whether a rate is reasonable or unreasonable. That step taken alone is in the nature of a court. That is a judicial function beyond a doubt. It has been decided so by the Supreme Court. There is no question about it, that a determination primarily of what is a reasonable or an unreasonable rate is a judicial function. Now, the Interstate Commerce Commission in that sense is not a court. It has never been so constituted. Its trials are not conducted in accordance with the established rules of evidence of the United States courts, and yet it is suggested in that bill that it shall have the specific right to do what only a court can do-declare a rate unreasonable per se.

Now, if that is the case, they are exercising there a judicial function. Let us take the next step in what would be their procedure in that case. Having taken that judicial action and condemned a rate as unreasonable and unjust, as if they were a court, their next step is, under such authority as is now proposed, to place in existence under its order a new rate- a rate which shall govern for the future. They were dealing up to that point with a rate which related to the past or the present. Now it is proposed that they substitute for that rate, which they have condemned as unreasonable, a rate for the future. To what department of the Government does that belong? That is distinctly, under the law, under the decisions of the courts, a legislative function. The power to name a future rate, so far as it is invested in government, is purely a legislative function.

Now, you are going to have this position. You have got, under the existing law, and it is proposed in this bill to change it, a body which is a prosecuting body. It has been described by Justice Jackson, as I said to you a day or two ago, as follows:

The functions of the Commission are those of referees, or special commissioners, appointed to make preliminary investigation and report upon matters for subsequent judicial examination and determination. In respect to interstate-commerce matters covered by the law, the Commission may be regarded as the general referee of each and every circuit court of the United States upon which the jurisdiction is conferred of enforcing the rights, duties, and obligations recognized and imposed by the act.

You have, therefore, got a prosecuting body exercising administrative functions, as they do to-day, whose findings are prima facie evidence when the cases go to court. It is proposed to invest them, in the next step, with a purely judicial function of condemning and setting aside a rate because in their judgment it is unreasonable; and when that judgment is pronounced they can not possibly have sat with all the powers and functions of a court, and under all the practices of a court, and a rate ought not to be condemned until that has been done. Yet it is proposed that this Commission condemn it and set it aside. Then it is proposed that, having set it aside as a judge, they shall immediately assume the functions of a legislature and say what shall take place for the future.

I submit to the committee whether, if there is to be legislation upon this question--and I am not saying that there is not to be and ought not to be; I am passing the question for a moment and will come back to it if that is the case, is it not worth while to stop now and consider whether the particular legislation which is now proposed is safe, is proper, is such that will stand and be effective, and so far as the carriers' interest is concerned. What is possibly equally as important, is it fair to the carriers' interest?

I am sure that Congress will not enact, I am sure that this committee will not recommend, a thing which, after mature reflection, is regarded as unfair to one of the very great, if not the very greatest, industrial interest in this country. All we have the right to ask, and all I ask in behalf of those that I represent, is that the subject shall be given a very thorough and careful consideration before action is taken.

Let us see exactly what the bearings of all this are going to be. Pause to consider its alleged necessity upon the one part, and upon the other if it is not necessary; its expediency upon the third, and then the promise of success whenever it is enacted.

I have occupied a great deal of your time and I must still apologize. There is only one point more, and I will pass it before I make you a suggestion.

It has been claimed-and I am sorry I have not time to elaborate that that the granting of this power is not the granting of the total rate-making power. It is a big subject, and I will call your attention to only one case, the maximum-rate case, in which it was decided against the Commission that they did not have the power to make rates. That case involved 2,000 rates in one decision. It means not only that upon complaint they have the right to take up any one rate or set of rates. It means, sooner or later, that not only will they have the power to do it, but the greatest misfortune of all would be that the making of them all would be practically forced upon them. They could not escape it.

Now, I am going to very briefly make a few suggestions.

(1) Form an interstate-commerce court, or so increase the number of judges of the existing court that a special interstate-commerce court can be formed from their number, which shall have special jurisdiction over all cases arising under the interstate-commerce act and its amendments; this court to pass upon all rates adjudged by the Commission on com plaint and hearing to be unreasonable before the rate shall take effect there being no appeal from the decision of this court to the Supreme Court, except upon questions of law, and no stay during such appeal. (2) Bring the private-car lines, fast-freight lines, and the water lines doing a through interstate traffic within the jurisdiction of the interstate-commerce act.

(3) Relieve the carriers of the existing prohibitions against making reasonable agreements among themselves for the purpose of maintaining lawful rates, the agreements and the rates to be subject to the previous approval of the Interstate Commerce Commission."

(4) Enforce the existing laws, not only as a matter of administration of law and justice, but as the most effective means of eliminating the number of complaints.

I want to reiterate that we are not here asking that there shall be no legislation. If in the wisdom of Congress it is thought proper, I suggest that it should take this line: Form an interstate commerce court, or probably better still, give special functions to special sittings of the circuit courts of the United States. Give to the Commission the right to name the rate or suggest the rate, subject to appeal to the courts. That will leave the question where it is if the railroads acquiesce, and they have acquiesced in nearly 90 per cent of all the cases. Now, if they do not acquiesce and take it to the courts, let the rate remain in effect, and the railroad company give bond until the court—I mean the circuit court alone, this interstate commerce court, either a special court or made up from judges of the other circuit courts sitting here or anywhere else-decides that the rates shall go into effect. Then it goes into effect, and there is no suspension after that in appealing to the Supreme Court on questions of law. Begin at the circuit court, stop the appeal at the circuit court, except in cases of law going to the Supreme Court, and that appeal on a law point to the Supreme Court not to stay the proceedings.

Mr. Escн. Suppose you have a separate court?

Mr. SPENCER. Give it exactly the same power with the right of an appeal on questions of law to the Supreme Court without stay of proceedings.

Bring the necessary water lines engaged in interstate commerce which are competitive with rail carriers the fast-freight lines, the private-car lines-all of them within the purview of the interstatecommerce law. All of those three which I now mention are exempt.

Relieve the carriers, as I have already suggested, of the anomalous prohibition now against them that they must maintain uniform rates, and at the same time be prohibited from forming any agreement as to what those rates shall be; and give them the authority, under the supervision of the Interstate Commerce Commission, to make reasonable traffic arrangements among themselves, those traffic arrangements to be in writing, to be submitted to the Interstate Commerce Commission before they take effect, and if approved by the Interstate Commerce

Commission to go into effect, and unless they are found to be reasonable and proper, to give the power to the Interstate Commerce Commission to annul them at any time.

Lastly, which is nine-tenths of the whole subject, do anything that will strengthen the hands of the Commission at any time to do away with abuses and rebates.

Mr. TOWNSEND. Without appeal?

Mr. SPENCER. In a word, enforce the present law, and do anything that may be necessary to promote that enforcement.

Gentlemen, I am very much obliged to you for your courteous attention.

Thereupon, at 12 o'clock m., the committee adjourned until Monday, January 16 1905, at 10.30 o'clock a. m.

MONDAY, January 16, 1905.

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

STATEMENT OF HON. W. R. HEARST, MEMBER OF CONGRESS FROM NEW YORK.

The CHAIRMAN. The committee will be in order. This hour was set for hearing Mr. Hearst. Under this order, Mr. Hearst, the committee is considering all of the bills amendatory of the interstatecommerce law, and is hearing upon all of them together, and so there will be no impropriety in your discussing any of these bills pending before the committee if you so choose.

Mr. HEARST. Yes, sir. I think that I will confine myself, Mr. Chairman, to my own bill, except where the committee desires my views on another.

The CHAIRMAN. Very well.

Mr. HEARST. I wish to say that I do not appear before this committee at all as a lawyer or as an expert railroad man, but merely as a business man who has had some experience before the Interstate Commerce Commission, and of course as a legislator with a bill to correct some of the difficulties and delays and the lack of effectiveness that I encountered while I was before the Commission. I had the coal trust cases before the Commission. They were instituted in the fall of 1902, and it has been something over two years since then, and we have not finished our procedure before the Commission yet. Then we encountered other delays.

The CHAIRMAN. Will it interrupt you if you are interrogated as you pass along, or would you prefer to conclude your remarks first?

Mr. HEARST. Not at all. Anything that suits the committee is agreeable to me.

The CHAIRMAN. You speak of this long delay before the Commission. What is the cause of that delay?

Mr. HEARST. The cause of the delay was the number of points that can be appealed, and the delay in the appeals, and the number of

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?