The CHAIRMAN. That is what I want to know, can we require them to declare? 4 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 forthwith 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, subject 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. 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 advance, 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. continues: Section 4 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, I believe, so they say. Mr. HEARST (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: EVILS OF INTERSTATE COMMERCE-QUARLES-COOPER BILL DEFECTIVE-A JOINT CONGRESSIONAL COMMISSION ON INTERSTATE COMMERCE FAVORED. ROOMS OF THE NEW YORK BOARD OF TRADE AND TRANSPORTATION, 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 use of the private car. The railroad company in turn settles with the private car company. Finally, the private car company pays to the shipper the rebate previously guaranteed to him. The shipper, having been assured of his rebate in advance of the transportation, has been able to calculate in his own transactions the ultimate return to himself of the amount agreed upon. By this device his goods have been transported at a less rate than those of his competitor, and he has enjoyed an advantage over him to that extent. But these are evils which, if not reached by the broad, comprehensive, far-reaching provisions of the Elkins law, as supplementary to the interstate-commerce act, could not be reached by the Quarles-Cooper bill. All other known forms of discrimination and preference between shippers are now forbidden by the Elkins law, and summary methods of proceeding by the courts are provided with penalties seemingly adequate, if enforced, to deter such practices. Mr. E. P. Bacon, of Milwaukee, the distinguished and able leader of the advocates of the Quarles-Cooper bill, wrote this board October 5, 1903, as follows: "The Elkins bill, which was enacted at the last session, seems to provide the most effectual means possible of preventing such discrimination (between shippers), either in the granting of preferential rates or the paying of rebates or by any other device. The legislation on this point seems to be as complete as it is possible to make it." The consideration of the Quarles-Cooper bill has thus far been mainly confined to a discussion of the rate-making powers provided. This is a very important feature of the measure. Intelligent men honestly differ as to the propriety of giving such power to the Commission. The advocates of the bill deny that it gives that power except in cases determined by the Commission upon complaint, but that it empowers the Commission to require the substitution in future shipments of a rate declared to be reasonable for one declared to be unreasonable. This provision, it is declared, would require the substitution "for the future" of the rate named by the Commission, but it must be observed that this interpretation of its meaning is the purest assumption, as the words "for the future" do not appear in the bill. These words, "for the future," were in all the original bills and in the draft of the Quarles-Cooper bill, but before its introduction in the present Congress they were stricken out by Mr. Bacon and his counsel, lest their presence would cause the courts to adjudge the bill unconstitutional. Thus the bill is intended by its advocates to accomplish by obscure language the doing of something which, if plainly declared, they themselves believed unconstitutional. It is not probable that the eye of the Supreme Court of the United States would fail to penetrate this disguise. But this provision is open to a radically different construction, which, if held, will utterly confound those who, trusting to their leaders, look for relief from its passage. As stated above, it is intended that the rate substituted by the Commission for the rate complained against shall apply to future shipments. Serious doubt can well be raised that this construction would be sustained. A complaint is made against the validity of a specific charge or rate made upon a specific shipment. The case is tried and determined, as Mr. Kernan said, after the complainant has died of old age. The difference between the shipper and railroad on that shipment is adjusted, but there is nothing in the bill which provides that the railroad shall not charge the same rate upon the next shipment, and the framers of this bill dare not make the language so as to explicitly provide that the corrected rate shall apply "for the future. The existing Elkins law, on the other hand, does not run amuck with any such doubtful construction of its terms. But it is said it gives the Commission no power to correct the rates or to declare a lawful rate. The Elkins Act is specific in forbidding any unlawful rate and clearly elucidates what rates are unlawful. It with equal directness declares the "tariffs published and filed by such carrier" to be lawful. The Commission after investigation could do no more. If the carriers are held rigidly to their tariff rates it matters not much what those tariffs are if all shippers are charged and required to pay alike, and excessive tariff rates are no longer to be accounted with to the same extent as formerly. Hon. Martin A. Knapp, chairman of the Commission, at a public hearing before the Senate Committee on Interstate Commerce, March 18, 1898, made the following declaration: "The question of excessive rates, that is to say, railroad charges, which in and of themselves are extortionate, is pretty nearly an obsolete question.' Furthermore, the penalties under the Elkins law are heavier. In this respect it provides that "Every person or corporation who shall offer, grant, or give or solicit, accept or eceive any such rebates, concession, or discrimination shall be guilty of a misde |