Now, if you take any case which arises at this time, when competition has been largely eliminated, how is it possible to arrive at any conclusion as to what is a fair rate, except the enlightened judgment of an experienced and fair tribunal like the Interstate Commerce Commission, having on file all previous rates and statistics pertaining to the operation, earnings, expenditures, and finances of each road? For what good reason should any court review its decisions except to determine mere questions of their lawfulness and to preserve constitutional rights? The Supreme Court of the United States has repeatedly said that the Commission is more competent to pass upon the facts than the courts. This is manifestly so, because each investigation enhances its knowledge, and familiarity with the subject enables it to analyze and classify the facts, rejecting the errors, and to base its findings upon the reliable evidence aided by its own accumulated knowledge. As an example of this, in a case respecting dead freight, railway representatives testify that heavy train loading and heavy equipment has not proven an economy in operation. That was where the contention was made that because of these factors rates should not have been advanced. In another case, where the same roads are defendants, they proved that because of lighter train loading of live stock than other freight the advances in rates were justified. This shiftiness would enable the roads to hoodwink two different courts, but not so the Commission, which is entitled to use its enlightened judgment. Such examples might be multiplied indefinitely. In my opinion, there is no argument against leaving to the Commission every power which it now has and extending the same so that it may adequately and speedily enforce the provisions of the act without unnecessary interference from the courts. Mark it that those who oppose these simple amendments are not looking for railway regulation for the public good.

INTERSTATE COMMERCE COURT SHOULD NOT BE EMPOWERED TO SUBSTITUTE ITS JUDGMENT UPON THE FACTS FOR THAT OF THE COMMISSION.

The proposition, which has been made in various forms, to establish an interstate-commerce court should be very carefully scrutinized and its jurisdiction should not extend to the determination of the matters of fact, except in so far as the same might be necessary in ascertaining whether the Commission's decision was in violation of some law or constitutional rights. In other words, its judgment upon the facts should not be substituted for that of the Commission. It should be made to work in harmony and not in opposition to the Interstate Commerce Commission. It should be constituted in fact a court to protect the rights rather than to act as a trier of facts. Its object should be to speed, rather than to impede, the prompt enforcement of the Commission's order. There should be only one such court, so that on all questions it may act speedily as a unit, and its judgment should be final except on constitutional questions. Its power to review any action of the Commission should be confined to ascertainment of whether or not the Commission's order is in violation of law or constitutional right, and it should not be permitted to suspend such order pending the court's decision except where it is manifestly unlawful.

I CL-05-21

The procedure before it should require a prompt submission of the findings of the Commission and the original testimony, without the enormous expense of printing or copying, to such court on any application to suspend the Commission's order, and that it decide the matter of such application promptly upon that record. In all such matters a speedy determination is the most important element, and while the impossibility of a judicial procedure through the regular channels of our courts affording sufficient promptness may, and doubtless does, justify the establishing of such a court, yet the validity of any procedure before the Commission or the validity of its findings and decisions should not be made to depend upon the constitutionality of any law establishing such court or defining its powers, that is to say, if Congress makes a mistake in the one law it should not affect the other. We have all along supposed that it is not within the constitutional right of Congress to vest in the judiciary rate-making powers, directly or on appeal, though it may confer such power upon a commission. In view of which it will be readily observed that in the event of such power being conferred upon the Commission no appeal could lie to any court for a review of the Commission's determination of a rate for the future for want of constitutional power of the court to exercise the legislative function of rate making. We want the interstate-commerce act so amended that the Commission, after hearing on complaint, may name a proper rate to take the place of an unlawful one, and we don't want that power destroyed because of the invalidity of some law providing for review by some court.

Furthermore, it would seem foolish to have a court review the Commission's findings of fact and determination of what should be a proper rate; the findings of some one must determine it, and suppose the court has the power of review and should arrive at a different conclusion to the Commission; upon what ground could it be said that the court is any nearer right than the Commission? Why substitute the court's judgment for that of the Commission on the facts or questions of a proper rate, when a Commission is the more competent to decide it, as the courts have repeatedly admitted?

The only excuse for an interstate-commerce court is to provide an appropriate and speedy opportunity to have passed upon the questions pertaining to the lawfulness of the Commission's decision and protection of constitutional property rights; if it goes beyond that it will be a snare and a pitfall.

The courts as they exist now can afford to parties complaining of the Commission's decision respecting a future rate as proposed adequate protection. Certainly until the new part of the proposition-that is, the establishing of a special court-can be deliberately planned and carried out. There is no haste necessary, so let that part of it rest till you ascertain how much it is needed. How foolish it would be to establish a new court in a hasty and imperfect way.

THE PROPOSITION TO ALLOW POOLING UNNECESSARY; BESIDES, IT WOULD BE DESTRUCTIVE OF COMPETITION AND GOOD PUBLIC SERVICE.

The present law prohibits pooling; that is, it prohibits two or more lines of railroad leading from one commercial center to another from agreeing that they will divide their earnings or traffic. That provi

sion of the law was no doubt inserted so as to preserve competition, both in respect to the matter of rates and quality and character of service. It looks to me that it will be a step backward to now legalize pooling and destroy competition. I can not see that it will have any material effect upon the question of rates if the Commission is given power to fix rates in case of a pooling agreement or arrangement, but the question of service performed for the rate charged is quite as material as the rate itself, both with respect to the carriage of freight and passengers. There would be no way in which the Government can successfully regulate the quality of the service which shall be rendered for a given rate. It could only do so in a general way. I predict that in case Congress should legalize pooling that it will be found by experience that it will be at the sacrifice of the service in point of quality and time. There does not seem to be any necessity for it. It is not necessary in order to prevent rate wars, since there can be no competition if the railroads all maintain their published rates. If one reduces a rate, the other does or may, so that very little traffic will be diverted by the reduced rate from one line to another. Besides, most of the rates are made practically by agreement between the interstate lines.

I have no hesitancy in saying that it is an advantage to the railroads to be able to agree upon the rates which shall be charged, and such agreement through traffic associations or otherwise might be legalized provided the rates thereby made are put into effect under such agreement and are subject to the supervision of the Commission in every case as a condition precedent to being effective, and thereafter to investigation and change upon complaint. That sort of an arrangement would leave out the danger of rate wars, which is the main argument in favor of pooling, but would leave the public the benefit of competition in the matter of service, as each road will undertake then to render such service as to induce the largest movement over its lines, and still be left with the incentive to afford the best service possible to get the business. I believe in retaining the present law with such additions only as are necessary, and after perfecting it let it be fairly tried. It is like having a complicated machine, every part of which works well, but there is a want of sufficient power to produce results. Let the power be given the Commission to operate under the present law and the public will have as simple a remedy as possible, and the railroads, knowing that the remedy exists, will adjust most of the disputes with shippers without compelling a resort to the Commission.

I desire to impress upon the members of this committee that if you make a provision in any bill which contains an interstate commerce court that such court shall pass upon the reasonablenes or the fairness of the decisions of the Commission, or their justness, you might as well abolish the Commission entirely, because the question of reasonableness is a question of fact, and the court would simply be substituting its judgment for that of the Commission without the power to fix the rate for the future. In such a case the court would be destructive of the power of the Commission, as it might happen that its judgment was different from that of the Commission.

The making of the rate by the Commission is a legislative power, and it has never been considered that the courts have jurisdiction to inquire into the reasonableness of the action of a legislature or a legis

lative commission in determining the facts. It is unnecessary, because if the Commission acts lawfully, within the limits of the Constitution, there need be no fear that serious injustice will be done, and if Congress has not confidence in the Commission acting justly in the premises, upon what consideration might it be expected that the court would be better qualified to do so?

Suppose, for example, that the Commission should decide that a given rate, under all of the circumstances was unreasonable to the extent of 1 cent per 100 pounds. That would be a matter of judgment. Now, suppose that the court should hold according to its judgment it should not be advanced and set aside the findings of the Commission simply because the court might think that the Commission's decision was not reasonable. There is just as much sense in having another court to pass upon the reasonableness of the judgment of that court, and so on, ad infinitum, as to have a court determine whether the Commission's decision is reasonable.

I desire also to call this committee's attention to the fact that in the bills so far presented, wherein it is proposed to have a court to review the action of the Commission, it is only the railroad that is given the right to review. Can it be possible that the railroads have greater rights in this particular than the public? I say that if the court is to be given the power to determine whether the Commission's decision is reasonable the public and the shipper is as much entitled to it as the railroad and they will demand it, and on behalf of my clients I do demand it at the hands of this committee. My judgment is that it will be found that it is destructive to the act to put any such provision in it.

THE BOND OF THE RAILROAD TO REFUND TO THE SHIPPER.

I undertake to say that this provision is simply an illusion in the form in which it appears in any of the bills which I have seen. I am speaking plainly, but to the point. What need is there for the bond of a solvent railroad company to bind itself to pay back to the shipper the unreasonable charge but to burden the shipper to sue the railroad company on the bond in order to recover it? He has exactly the same right under the common law to-day, and he has the same right under the interstate commerce law to-day. He can not resort to it; he will not resort to it; and it will be of no benefit whatever. The present act provides fully for reparation. It provides that in case the rate is unreasonable or otherwise unlawful the Commission may order what reparation it recommends that the carrier shall pay to the shipper, and the shipper can make his case in court by filing a petition to recover that money, in the trial of which the findings of the Commission are prima facie evidence. If he succeeds, the court allows costs and attorneys' fees. Therefore, the bond proposition is an entirely useless incubus in cases of solvent railroads and no suit will ever be brought upon it.

WARNING.

From a careful and exhaustive study of the interstate commerce act and the decisions of the courts with respect to the same, having detailed knowledge of its provisions and the practice under it, I beg

to warn this committee, if it desires effective legislation, to act not so hastily as to turn out and present a bill that does not bear the impress of deliberate and careful judgment.

EXHIBIT No. 1.

Cattle rates from Southwest higher than any time in fifteen yearsGeneral complaint--Rates for Southwest fixed by combination of the railroads-Competition eliminated-Testimony of railroad officers in the matter of class and commodity rates from St. Louis to Texas common points in force over the Missouri Pacific and other railways.

[C. HAILE, freight traffic manager of Missouri, Kansas and Texas Railway Company.] Mr. BRYSON. Had you in the face of these new rates of March, 1903, taken into consideration the water-competition feature from New York to Galveston? Was that a controlling element?

Mr. HAILE. Possibly not a controlling element, but a very important factor in the making of the rates; it was really one of the strongest factors that appeared to my mind. I had, previous to our announcement of this advanced scale, a great deal of talk with the representative of the Mallory Line.

Mr. BRYSON. That line is not subject in any way to the filing of tariffs with the Interstate Commerce Commission?

Mr. HAILE. I understand not from New York to Galveston; so far as parties to a through rate is concerned, I do not know whether they file their rates or not. But I was going to say that I had a talk with the view of determining whether or not it was possible for them to make any advance, in view of the competition they have from tramp vessels—schooners. I was satisfied in my own mind that so far as the rail lines from St. Louis were concerned-and from Chicago we were all of one opinion-that the rates ought to be advanced; that there was no reason why they should not be, and every reason from our own standpoint why they should. The question arose with me as to whether or not it was possible to get these rates, these water rates, which might be used to defeat any through tariffs, advanced, and I was satisfied from this conference with Mr. Warfield that they could make some advances in their rates, and I knew about what volume of advance that would probably be.

Mr. BRYSON. There was no understanding or agreement between you and the water representative what the advance would be?

Mr. HAILE. Absolutely none.

Mr. BRYSON. You felt it your duty to advise yourself whether your line, independently, could undertake to advance the rates on your line?

Mr. HAILE. Yes, sir.

Mr. BRYSON. I think that is all.

Commissioner PROUTY. Mr. Haile, most of the articles to which these advanced rates apply are produced both in the Middle West and on the Atlantic seaboard, are they not?

Mr. HAILE. A great many.

Commissioner PROUTY. And there must be a relation of rates between those two points and Texas common points?

Mr. HAILE. 'Yes, sir.

Commissioner PROUTY. Would it be possible for you to advance your rates without the rates from the Atlantic seaboard were advanced?

Mr. HAILE. I think the result would be to divert to eastern markets a great

deal of the tonnage now handled from the middle western markets. Commissioner PROUTY. As a matter of policy, you would not be disposed to make a general advance unless there was an advance there? Mr. HAILE. Yes, sir.

Commissioner PROUTY. On the other hand, it would not be possible for them to advance their rates unless you advanced yours?

Mr. HAILE. I think not.

Commissioner PROUTY. Before the rates of the Cromwell Line were advanced, had you any talk or understanding with the managers of that line that if their rates were advanced yours probably would be?