to work any hardship on these great corporations who are rendering in their respective fields and areas a high public service.

I recognize that it may be that in certain cases of litigation involving them that some of them from time to time may suffer some hardship or inconvenience if this bill should be enacted into law. But I think on the whole it would be of great benefit to the citizens and to the corporations of this country because what is for the public good comes down finally to the individual good of all.

I got to ad libbing there and lost my place.

The fourth point, the number of diversity of citizenship cases commenced during fiscal year 1955 was 19,123; the number commenced during fiscal year 1956, 20,525.

5. The effect of proposed changes in jurisdiction of Federal district courts on civil cases as contained in H. R. 2516 is that the jurisdictional amount in Federal question and diversity of citizenship cases would be increased from $3,000 to $10,000. The word "citizens" as it now appears in the United States Code would be changed to "individuals who are citizens" so as to exclude suits by corporations which are based on the diversity of citizenship jurisdiction.

Now, I recognize that my bill may have gone a little bit further than some others may feel that it should go. I believe that there is more merit in the proposal which I have made than in any of the lesser proposals which are being made in this field of corporations versus citizenship.

I recognize that I am going up against powerful big guns in the person of the distinguished United States circuit judge who is here this morning, whom I understand represents the Judicial Conference, including my dear, distinguished, and beloved friend, Judge Parker, of North Carolina, and in whom I have unbounded confidence.

But nevertheless, I have raised these questions, and while I am unable to solve them, certainly insofar as I am concerned individually, I lay the matter before the committee, and whatever the committee may deem proper and appropriate will be perfectly agreeable to me.

I regret I have taken up so much time, particularly in the light of the fact that we have the distinguished United States judge here and one of our distinguished colleagues in the Congress to be heard from. But I had to get it over.

That is all I have to say unless there are some questions. If there are any, I will be glad to answer them if I can. If I can't, I will try to find the answer.

Mr. WILLIS. You got it over very well, as usual, Governor.

Mr. Tuck. Thank you.

Mr. WILLIS. I want to ask 1 or 2 questions.

You indicated-and properly, I think-that an increase in the monetary amount from $3,000 to $10,000 may not accomplish what you hope for because some lawyers are inclined, some people say, to inflate their claims, their demands.

Now, how would you feel about a provision along this line: Suppose we would consider a provision which would indicate that the plaintiff shall pay cost of court unless in the judgment rendered on the merits, not compromises, he recovers a certain amount?

Wouldn't that be a deterrent to inflation of claims?

Mr. Tuck. I think you are exactly right, and I think that would certainly be an effective way to reach much of the difficulty.

I do say, of course, it is desirable to raise it, I think, from $3,000 to $10,000, but I fear that that measure alone, unsupported by some such suggestion as you have made, would not accomplish much.

Mr. WILLIS. Thank you, Governor Tuck.

Mr. Tuck. Thank you, Mr. Chairman.

Mr. WILLIS. I understand my colleague, Mr. Ashley, cannot be here, but that his administrative assistant is here and wants to offer a statement for the record.

Mr. ANDERSON. Yes, Mr. Chairman. My name is David Anderson; I am administrative assistant to Congressman Ashley. He has asked me to express his regrets to the members of your committee that he is unable to appear this morning, but he is in a meeting with his own Merchant Marine Committee.

I ask that the Congressman's statement be included in the record of this hearing.

Mr. WILLIS. That will be done at this point.

(The statement is as follows:)

PREPARED STATEMENT OF HON. THOMAS LUDLOW ASHLEY, A REPRESENTATIVE IN CONGRESS FROM THE NINTH CONGRESSIONAL DISTRICT OF THE STATE OF OHIO Chairman Willis and committee members, I appreciate the opportunity of appearing before this distinguished subcommittee on behalf of my bill, H. R. 4497, which fixes the jurisdictional amount in Federal question and diversity of citizenship cases at $10,000 and provides that in cases based upon diversity of citizenship a corporation shall be deemed to be a citizen both of the State of its creation and the State in which it has its principal place of business.

As you know, similar legislation has been considered by the House of Representatives on a number of previous occasions-in fact, a bill raising the jurisdictional amount to $10,000 in Federal question and diversity of citizenship cases passed the House in the 82d Congress on May 19, 1952.

That particular bill, and many other bills previously considered, had the expressed approval of the Judicial Conference of the United States, whose Committee on Venue and Jurisdiction made a thorough study of the need for such legislation in 1950 and 1951 at the request of the chairman of the full committee, Representative Emanuel Celler.

Again in March of this year the Judicial Conference, which will be represented this morning by the Honorable Albert B. Maris, United States circuit judge, third circuit, Chairman, Judicial Conference Committee on Revision of the Laws, submitted a resolution reaffirming its earlier support of legislation along the lines I have proposed. That resolution, found on page 9 of the Report of the Proceedings of a Special Session of the Judicial Conference of the United States, held here on March 14 and 15, reads as follows:

"DIVERSITY OF CITIZENSHIP JURISDICTION

"Chief Judge Biggs reported that the Committee had considered at length various proposals for restricting or modifying the present diversity jurisdiction of the United States courts. The Committee found that the situation in respect to diversity jurisdiction is an extremely complex one and was not prepared to deal at length with the subject until further statistics have been procured from the Administrative Office and the matter has been considered further.

"Previously the Committee had recommended that the jurisdictional amount be placed at $15,000, exclusive of interest and costs; but it was now of the view that it should modify its former recommendation and adhere to that expressed by the Committee on Jurisdiction and Venue, of which Chief Judge Parker was Chairman. Accordingly it unanimously resolved that the Committee recommend to the Judicial Conference that the jurisdictional amount in diversity cases be increased to $10,000, exclusive of interest and costs, and that every effort be made to procure the enactment of such legislation by the present Congress.

"The Committee also was of the view that the recommendation made to the Conference by the Committee on Jurisdiction and Venue, that a corporation be deemed to be a citizen not only of the State of its incorporation but also of the

State in which it has its principal place of business, should be renewed at the present Congress.

"These recommendations were adopted by the Conference and the Committee was authorized to continue its study of jurisdiction in diversity-of-citizenship cases."

The Judicial Conference recommendation regarding the amount in controversy is based on the premise that the amount should be fixed at a sum of money that will make jurisdiction available in all substantial controversies where other elements of Federal jurisdiction are present. The jurisdictional amount should not be so high as to convert the Federal courts into courts of big business nor so low as to fritter away their time in the trial of petty controversies.

The present $3,000 minimum, set by an act of Congress in 1911, clearly requires that the Federal district courts must consider petty controversies. In view of the value of the dollar today-compared to the value it had in 1913-a $10,000 minimum in such cases will assure that our Federal courts are hearing substantial controversies without in any way barring litigants from our Federal courts. Jurisdiction based on diversity of citizenship was established by the Judiciary Act of 1789, the beginning of the Federal judicial system. Jurisdiction based upon a Federal question, on the other hand, only dates back to 1875, except for a brief interlude of "the law of the midnight judges" in 1801. The explanation is that diversity jurisdiction has been recognized from the beginning as essential to the proper administration of justice under the system of dual sovereignty established by our Constitution.

Under this dual sovereignty the courts of each State furnish a foreign jurisdiction as far as citizens of other States are concerned. The States, as members of the Federal Union, are denied the right of independent nations to pursue justice in behalf of their citizens through diplomatic channels against citizens of other States; and, in lieu of this, the Constitution provides courts of the Federal Government to administer justice in cases where citizens of different States are involved, so that neither party may be required to seek justice from the State of his adversary.

It is now an established doctrine that for jurisdictional purposes a corporation is deemed a citizen of the State in which it is incorporated. This has given rise to the evil that a corporation, which in reality is a local corporation engaged in a local business and locally owned, can drag its litigation into Federal courts because it has obtained a charter from another State, and may proceed on a legal fiction that a diversity of citizenship exists.

This evil can be corrected by the proposal contained in my bill. It provides that a corporation, for purposes of jurisdiction, be deemed a citizen of any State by which it has been incorporated, and also a citizen of any State where it has its principal place of business. The proposal to rest the matter upon the principal place of business of the corporation has a precedent in the jurisdictional provisions of the Bankruptcy Act, United States Code, title 11, section 11, and thus provides a familiar criterion.

I do not believe that it is either fair or proper for a corporation to avoid trial in the State in which it operates or has its principal place of business by resorting to a legal device not available to the individual citizen. The change I have outlined would correct this abuse.

In summary, Mr. Chairman, this legislation is based on the necessity of bringing the minimum amount in controversy in Federal question and diversityof-citizenship cases up to a reasonable level by contemporary standards, and to reduce, if not eliminate, the number of cases which come into Federal district courts on the fictional premise that a diversity of citizenship exists.

Mr. WILLIS. We are honored, as usual, to have Judge Maris with us. Judge, you are always welcome before this committee.

TESTIMONY OF HON. ALBERT B. MARIS, UNITED STATES CIRCUIT JUDGE, PHILADELPHIA, PA.

Mr. MARIS. I appreciate those gracious words, Mr. Chairman; and I am very happy to be on the same program with Governor Tuck. I am really honored to be here with him today.

For the record, my name is Albert B. Maris. I am a United States circuit judge stationed at Philadelphia, and I am and have been

Chairman of the Committee on Revision of the Laws of the Judicial Conference of the United States.

I appear here really on behalf and in place of Chief Judge John J. Parker, who regretted exceedingly that he couldn't be here, but he was prevented from attending this hearing because of a longstanding engagement to act as best man for his nephew at his wedding today, and he felt he couldn't very well leave that engagement.

I say that because Judge Parker was chairman of a committee of the Judicial Conference which studied this problem some years ago, in 1950 and 1951. The report of his committee was presented to the Judicial Conference and it was approved by it; and the net result, you might say, of the report and its approval, and subsequent modification, is the bill which Congressman Ashley has introduced, which bill carries out exactly the recommendations of the Judicial Conference which, as Governor Tuck has said, are not quite as far reaching as those of his own bill.

I should like, if I may, to present for the record the report of Judge Parker's committee. I think you may have copies of that. Mr. Tuck. I think I have a copy.

Mr. WILLIS. Let the report be incorporated in the record.

(The report, dated March 12, 1951, of the Committee on Jurisdiction and Venue of the Judicial Conference of the United States, is as follows:)

REPORT OF COMMITTEE ON JURISDICTION AND VENUE

MARCH 12, 1951.

To the Chief Justice of the United States, Chairman, and the Members of the Judicial Conference of the United States:

The Committee appointed pursuant to the action of the Judicial Conference at its September 1950 session to study and consider the overall problem of the venue and jurisdiction of the district courts of the United States' has given careful attention to the questions referred to it,' and has reached certain conclusions, which, with the underlying reasons, are reported herewith.

In its deliberations, the Committee has considered statistical studies and memorandums prepared by Mr. Will Shafroth, the Chief of the Division of

1 As originally appointed by the Chief Justice, the Committee was constituted as follows: Chief Judge John J. Parker, Chairman, and Circuit Judges D. Lawrence Groner (retired), William Denman, Orie L. Phillips, and Robert L. Russell; and District Judges John D. Clifford, Jr., John C. Knox, Phillip Forman, Arthur F. Lederle, Luther M. Swygert, and Richard M. Duncan (report of Judicial Conference, Sept. 25-27, 1950, p. 23). Shortly after the publication of the report, Judges William Denman and John C. Knox asked to be relieved of the assignment, and in their respective places Circuit Judge Albert Lee Stephens and Henry W. Goddard were appointed.

2 The report of the Chief Justice concerning the considerations which actuated the Conference to create the Committee is as follows (report of the Judicial Conference, Sept. 25-27, 1950, pp. 18, 21):

"District courts Jurisdiction and venue.-Chief Judge Parker presented a resolution of the judicial council of the fourth circuit with respect to legislation proposing to estab lish restrictions upon the existing statutory power of the district courts in the transfer of civil cases. It was the opinion of Judge Parker, as well as that of the judicial council of the fourth circuit, that, because of the numerous legislative proposals which had recently been introduced affecting the venue and jurisdiction of the courts, it was advisable to have a committee of the Conference created for the purpose of considering the entire question of venue and jurisdiction of the courts.

"The Conference, thereupon, directed that a committee of the Conference be appointed by the Chief Justice for the purpose of considering the question of venue and jurisdiction of the district courts."

"Courts Jurisdiction-Diversity of citizenship-Amount necessary to invoke.-The attention of the Conference was directed to various legislative proposals which had been introduced in the Congress under which the amount involved in litigation, in order to come within the purview of the jurisdiction of the district courts, either as cases based upon Federal law or upon diversity of citizenship, would be increased from the existing statutory minimum to various amounts, as set forth in the numerous legislative proposals which have been introduced.

"The Conference directed that the matter be referred to the Committee of the Conference which had been authorized and directed to be created to consider the over-all problem of venue and jurisdiction of the district courts of the United States."

Procedural Studies and Statistics of the Administrative Office of the United States Courts, and by Mr. William H. Speck, an attorney of that Division, and has studied past and present legislative proposals bearing upon the subjects considered.

After the pertinent statistical studies and memorandums were completed and these materials had been studied individually by the members of the Committee, a meeting of the Committee was held in the Supreme Court Building in Washington on February 14 and 15, 1950. At this meeting the following members of the Committee were present: Judges Parker, Groner, Phillips, Clifford, Forman, Lederle, Swygert, and Duncan. Judges Goddard and Stephens could not attend because of the pressure of judicial business, and Judge Russell could not attend because of a sudden illness. The Chief Justice of the United States was present throughout our sessions.

The Committee first discussed fully the fundamental questions of Federal jurisdiction presented by the Honorable Emanuel Celler, chairman of the Judiciary Committee of the House of Representatives, in his statement presented to the Judicial Conference at its September 1950 session. Mr. Celler had pointed out to the Conference that several bills were were then before his committee proposing to raise the jurisdictional amount required for bringing an original civil action in a district court or for the removal of such an action from a State court to a district court if it arises under the Constitution, laws, or treaties of the United States or is based upon diversity of citizenship. He indicated that during recent debates in Congress concerning bills to create additional judgeships, Members of the House had indicated a desire for his committee to consider such legislation as a substitute for additions to the judiciary and to relieve congested dockets. And he requested the Administrative Office to study the possible effect of the various proposals and the Conference to create a committee to analyze the problem in all its aspects with a view to recommending to the Congress appropriate legislation on the subject.

In view of the interest of the Congress in this subject as shown by the statement submitted to the Judicial Conference by House Judiciary Committee Chairman Celler, and of the expressions of the judicial conference of the ninth circuit advocating the abolition of the jurisdiction of the Federal courts based on diversity of citizenship, and of more recent bills introduced into the present Congress which would limit the jurisdiction and venue of the Federal courts, your Committee immediately directed its attention to the problems thus presented.

Pending bills which have recently been introduced in the present 82d Congress dealing with the jurisdiction and venue of the Federal courts are as follows: H. R. 78 and H. R. 1988, by Mr. Gossett, January 1951, to limit the removal of civil actions from State to Federal courts by raising the jurisdictional amount in removal cases from $3,000 to $15,000; H. R. 1328, by Mr. Denton, January 12, 1951, to limit the removal of civil actions from State to Federal courts by raising the jurisdictional amount in removal cases from $3,000 to $10,000: H. R. 1987, by Mr. Gossett, January 24, 1951, to amend title 28, United States Code, section 1332, to classify foreign corporations as citizens of States where they are doing business for purposes of both original and removal jurisdiction under title 28, section 1332, relating to diversity of citizenship cases; H. R. 3098, dated March 7, 1951, by Mr. Walter, to increase the jurisdictional amount for both original and removed cases, arising in the diversity or Federal question jurisdiction from $3,000 to $10,000; H. R. 1880, by Mr. Celler, and a number of similar bills by other Representatives, January 22, 1951, to amend section 1404 of title 28, United States Code, by adding a new subsection to limit the power to transfer an action from one district or division to any other in which it might have been brought.

In the 81st Congress, bills of similar character, which died with the expiration of that Congress, were introduced as follows:

H. R. 3643, by Mr. Young, and H. R. 3868, by Mr. Denton, to raise the jurisdictional amount for removed cases to $10,000; H. R. 3763, by Mr. Gossett, to raise the jurisdictional amount for removed cases to $15,000; H. R. 4938, by

Proposals to raise the jurisdictional amount above $3,000 in both removed and original actions were also advanced in debates on the floor of the House of Representatives in reference to bills to create additional judgeships, during the 2d session of the 81st Congress in the summer of 1950. See Congressional Record. 81st Cong., 2d sess., proceedings of the House of Representatives, July 20 and 24 and August 17, 1950, daily edition, pp. 1089510899, 11024-11041, 12921-12935. Amendments to this effect were offered to legislation relating to an additional judgeship for the northern district of Ohio, but were ruled out of order.