AUTHORITY TO INTERSTATE COMMERCE COMMISSION TO EXAMINE CORRESPONDENCE FILES OF CARRIERS

HEARINGS

BEFORE THE

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE OF THE HOUSE OF REPRESENTATIVES

AUTHORITY TO INTERSTATE COMMERCE COMMISSION TO

EXAMINE CORRESPONDENCE FILES OF CARRIERS.

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

HOUSE OF REPRESENTATIVES,

Friday, March 3, 1916.

The committee met at 10.40 o'clock a. m., Hon. William C. Adamson (chairman) presiding.

STATEMENT OF MR. EDWARD S. JOUETT, GENERAL ATTORNEY FOR THE LOUISVILLE & NASHVILLE RAILROAD CO., OF LOUISVILLE, KY.

The CHAIRMAN. Give the reporter your name, address, official title, experience, and occupation.

Mr. JOUETT. Edward S. Jouett, general attorney for the Louisville & Nashville Railroad Co., of Louisville, Ky.

The CHAIRMAN. The committee would be glad to hear you, Mr. Jouett, if you will proceed in your own way. I presume you wish to talk on the portion of the Rayburn bill that provides for investigating the books and correspondence of the railroad companies. Mr. JOUETT. Yes.

The CHAIRMAN. And also another bill which is incorporated with the Rayburn bill.

Mr. JOUETT. Mr. Chairman and gentlemen, there has been in the past a controversy between the L. & N. Railroad Co. and the Interstate Commerce Commission as to the extent of the latter's inquisitorial powers under the existing statutes. That controversy, however, has been disposed of by the Supreme Court, and I should like to make it clear that I do not appear here in a partisan spirit born of that controversy, but that I appear for most of the railroads of the country-those which are represented by the advisory committee for which Mr. Thom has appeared before you on other features of this bill. It is perhaps owing to the fact that I had some part in the litigation between the L. & N. and the Interstate Commerce Commission involving this subject that I was asked to discuss this feature of the proposed legislation, but I do so on behalf of all the railroads.

Mr. ESCH. You are one of the attorneys in the case of the L. & N. that was decided by the Supreme Court?

Mr. JOUETT. Yes. The subject to be considered to-day is the proposed amendment to the act to regulate commerce, which will give to the examiners of the Interstate Commerce Commission unrestricted physical access to all the correspondence files of carriers, and do this without regard to the confidential character of the cor

3

respondence or its irrelevancy to the matter under investigation. As the amendment is to section 20, a brief history of that section may be helpful to an understanding of the commission's request for this further extension of its powers thereunder. Section 20 was originally designed merely to require the making of statistical. reports to the commission of the operation of trains and of receipts and disbursements and other matters of accounting. The Hepburn Act, which went into effect in August, 1906, amended it so as to require carriers to keep certain sorts of records and books, and to give the commission's examiners physical access to the accounts, records, and memoranda thus required to be kept. Throughout the section those three wards-accounts, records, and memoranda-were invariably grouped together. Pursuant to this law, the commission's examiners were given access at all times to these statistical records of the carriers. In 1913, however, when the commission undertook an examination into the affairs of the L. & N. Railroad Co., pursuant to a resolution introduced in the Senate by Senator Lea, of Tennessee, a force of examiners came to the company's main offices at Louisville, and in addition to the request for access to the accounts, records, and memoranda, which was granted, they demanded access to the correspondence files and the correspondence generally of the carrier, first in the law department and then in the executive department. This demand was refused by the officials of the company upon the ground that the act did not provide for it. Two of the examiners, however, undertook to secure some of the executive files by force and were ejected by First Vice President Mapother.

Thereupon a mandamus suit was brought by the commission against the railroad company to require it to give access to its correspondence files. The lower court denied the mandamus, whereupon the commission took an appeal to the Supreme court, which upheld the decision of the lower court, stating as its sole ground for so doing the fact that the act did not provide for the examination of correspondence, but was limited to accounts, records, and memoranda, which words did not include the correspondence of the carrier. Other questions were presented to the Supreme Court, particularly the claim that if the words included correspondence the act to that extent was unconstitutional, because in violation of the fourth amendment to the Constitution forbidding unreasonable searches and seizures. The Supreme Court, however, refrained from deciding this constitutional question because it had already decided that the act did not include the word "correspondence." After the rendition of this opinion the commission applied to you gentlemen for this proposed act which will expressly give to the examiners physical access to the correspondence and all other documents and papers of the carriers. Two bills have been introduced in the House which seek to give this power. One of them, H. R. 722, introduced by Mr. Adamson, is rather a brief one, amending section 20 by merely adding the words documents, papers, and correspondence" to the words "accounts, records, and memoranda," and giving to the examiners the same power over correspondence that the Hepburn amendment gave with reference to accounts, records, and memoranda. A more elaborate bill is that of Mr. Rayburn, which is in two sections, the first of which covers this matter of access to correspondence, the second the regulation of the issue of securities.

66