What is the reason for not letting it take effect the same as is provided for in the other bill?

The CHAIRMAN. My bill says that if, upon full investigation, after a hearing by the circuit judge, the judge finds the case flagrant he can change the rate. The bill leaves the evidence to the court. In accordance with the reasons stated this morning by Mr. Bacon, the rate could be changed if it was found to be wrong, the changed rate to have twoyears' operation, during which time the railroad might have a loss of $400,000, for which it would have no recourse under these bills, because if it had recourse against the shipper the shipper could not collect it from the consumer. Whereas if the court finds against the railroad the other party has the right to recover, and can recover from the railroad. One is certain always of securing justice if the rate is wrongthe judge sitting there can, under my bill, change it.

Mr. JONES. So he can under the other.

The CHAIRMAN. There is very little difference between the two bills, I can assure you.

Senator KEAN. În the one case you are sentenced first and hanged afterwards and in the other case you are hanged first.

Mr. MEAD. I do not like to answer these hypothetical questions, Mr. Chairman, without having given thought to the matter. I have got myself in trouble several times in that way. It would seem to

me, however, that we would rather favor that feature of the bill that allows the Interstate Commerce Commission to fix the rate. The CHAIRMAN. And makes it operative at once.

Mr. MEAD. Yes. That would reverse the present order of things, but it seems to me that the business interests would be better satisfied with that version.

Mr. JONES. I think all these cases are emergency cases and ought to be tried at once, and that a prompt decision should follow; but if it be put in the shape Senator Elkins has it, of course the corporation should have, as it is usually understood to have, more power than the other fellow, and it might be a long time before any result would follow the decision of the court.

The CHAIRMAN. In some localities, if you give a chance to the jury, the corporation has no show whatever. I am trying to see both sides of this case. I have been on both sides; I know about railroads and their interests as well as about the interests of the other side. I do not want to say what we are going to do here, but it is our duty to look out for the interests of both sides of the question.

Senator CLAPP. I think we should give the Commission power to enforce its orders.

The CHAIRMAN. If we can break up rebates and stop absorption by giving the pooling privilege, then we shall have made a great step. If the court finds that the rate is too high, he should have the power to fix the rate right there and make it operative at that moment, because the case has been flagrant.

Mr. BACON. And when the Commission is in error somebody who is competent should pass upon that error, and that is the court.

Mr. MEAD. The business men, from their expressions that I have heard in the last two or three years, as stated in their organizations, feel that the Commission under present conditions might as well be abolished, and that the cost of its maintenance, approximating some $200,000 a year, might just as well be saved.

STATEMENT OF JOHN B. DAISH.

The CHAIRMAN. Please state your residence and whom you represent. Mr. DAISH. I represent the National Hay Association, an organization of about 700 men. The president of the association, Mr. George S. Bridge, resides in Chicago; he appointed me chairman of the special committee to appear on this occasion. My residence is Washington. Confining myself almost entirely to the two objects that have been outlined by you, Mr. Chairman, the first question has a dual aspect. We have heard from several of the gentlemen as to what the business men want, and what seems to the shipper and the farmer the best thing to do under the circumstances. We are confronted with a situ

ation.

The law passed in 1887 by reason of decisions of the Supreme Court in 1897 became practically ineffective, to a certain degree at least. We have stood under that decision five years, the decision having been rendered in the case of the Interstate Commerce Commission v. the Cincinnati, New Orleans and Texas Pacific Railway upon an act on the statute books which created a body whose powers were supposed to be enforceable, and yet by reason of that decision the statute was rendered ineffective. That decision says in effect to the commission: "You can sit here, but you can not exercise the powers which you have been exercising under that statute." That is where we stand to-day.

The object of these bills, whether the Nelson-Corliss bill or the Elkins bill, is to remedy the existing situation. We have heard from the business side of the question, and so it is not necessary to go into that in any great detail.

We have recently brought a complaint before the Interstate Commerce Commission alleging that because it changed the freight rate on hay, it made that rate unreasonable and unjust. That case is still pending.

Objection has been made in certain quarters to the constitutional features of any bill which provides that the Interstate Commerce Commission may make a rate for the future. It is conceded, I believe, that the power to prescribe a rate lies in the halls of this Congress.

Senator CLAPP. Is it seriously contended that Congress can not delegate that authority?

Mr. DAISH. No, sir. There seems to be no question raised about the right of Congress to delegate authority, but the question has been asked of me, for opinion, stating in substance that a railroad commission or the Interstate Commerce Commission can say that a rate of 30 cents a hundred from Chicago to New York on hay in car lots is unreasonable and unjust, and then can go farther and say to the carrier that "25 cents a hundred is a reasonable and just rate, and we therefore order and decree that you shall not charge more than 25 cents a hundred for this particular service." It is the latter portion

of that which is attacked.

The CHAIRMAN. This bill gives that power precisely.

Mr. DAISH. Precisely.

The CHAIRMAN. That power was taken away from the Commission by the Supreme Court because Congress had not given the power. So we propose in both bills to give that power.

Mr. DAISH. That is true.

I wish to cite, for the purposes of record more than anything else, a couple of cases analagous to this, wherein the Supreme Court has decided that such power can be given to a railroad commission. The power given in these bills is not primarily to fix the rate, but to say that a.certain rate is unjust, unreasonable, and exorbitant.

A question was asked this morning concerning the adequacy of the present law, whether the power if within the law itself could be enforced, and reference was made to injunction proceedings. We have read considerably in the press concerning these injunction proceedings. The injunction, as you all know, was a temporary injunction; and if the press correctly reports Judge Groscup, he is reported to have said practically as follows: that "were the objection on behalf of the defendants to this proceeding, I should be very careful in granting that preliminary injunction." That injunction, if I recollect rightly, is to be in force and effect until the final hearing, which is set for the 23d of June. The Government, I understand, rests its case largely upon the Debs case. It has become my duty recently to reread that Debs case; and with the little legal light that has been given me by instruction of professors at various times, and with my little experience, I must say frankly that I can not see the application of the case in re Debs to the rate for interstate traffic. That case was for an obstruction of a públic highway dealing with interstate commerce, and that obstruction was held by the United States Supreme Court to be a nuisance.

While the ordinary business man says that it is a "nuisance" for him to pay an excessive rate, it is not a legal nuisance. The fact that it is impossible for me, as a business man, to make shipment of various commodities on account of high freight rates does not constitute a legal nuisance. While I am not a prophet, it seems to me that sooner or later that injunction must be dissolved. As I see it, only some such legislation as is proposed in one of these bills can remedy the existing difficulty with which we are confronted.

Mr. BACON. That is the Nelson bill.

Mr. DAISH. I am referring to either bill at the moment. Either one will cover the point. I shall very soon come to the consideration of the differences between the two bills. The main difference, I take it, between the two bills, is the question of pooling. The CHAIRMAN. That is the substantial difference.

Mr. DAISH. My instructions in that respect are practically these: That the National Hay Association as an association-we have had no vote of the membership does not object to a regulated pool, a pool under the supervision, direction, or authority of a competent body.

The CHAIRMAN. Would you name the Interstate Commerce Commission? We can not name any other just now.

Mr. DAISH. We think that Commission is competent to take care of it. We think the members of that Commission are broad minded enough to look out for the interests of the public as well as for the interests of the carriers who would be affected by these pooling arrangements. It is immaterial whether a pooling arrangement is a pooling of earnings or a pooling of tonnage.

I have now given my instructions as an official representative. Personally, as a student of transportation matters, I am an ardent advocate of pooling, on two grounds. Not pooling generally, but_regulated pooling. First, it recognizes that movement which is going on

to-day in all classes and lines of business-a movement toward aggregation of capital. Boots and shoes are made in large factories. They are not made by a single individual man, as they were made twentyfive years ago. There is a tendency in the same direction on the part of the railroads. It is called "community of interest" for want of a better term. Legalized supervision of pooling will not only accelerate the movement of the pendulum in that respect, in my judgment, but it will help to secure the greater and better interests of all parties concerned.

The history of the pool which existed prior to 1887 in the Southern States without doubt shows that not only were freight rates less, that the service was equally as good, and that no one was injured, but that on the whole the shippers and carriers were alike benefited under that arrangement.

The CHAIRMAN. That was pooling, Mr. Daish, without the supervision of a commission.

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Mr. DAISH. I was just coming to that. It was an unregulated pool, if I may use the term. I am very fond of using the term regulate in this connection, because it is the word that is used in the Constitution. You might call that an ex parte pool. Yet no one seemed to object; no one raised his hand and said, "You are squeezing me." At least, if such objections there were, I have not heard of them.

Take the case of the pool of individual carriers, competent railway people versed in transportation matters; bring a case before them where one party says the rate is apparently right, and the opposite party says that it is apparently wrong; where one party says if the pool rate goes into effect it will injure a certain trade, a certain locality, or a certain individual engaged in a particular trade, one who is situated slightly differently from some other person; let that body give the case careful thought, and it seems to me that pooling will not only be favored but advocated.

I have given my personal views on the subject of pooling; and while, perhaps, I have stated the case more strongly than the hay association would care to have me do in my representative capacity, yet I earnestly believe what I have said concerning pools.

There is one other difference, I take it, between the Nelson-Corliss bill and the Elkins bill, and that is the force and effect to be given to the decrees of the Commission after hearing before them and pending appeal. Suppose, for example, that it will be two or three years. before you get a given case to the Supreme Court of the United States: in the Nelson-Corliss bill, unless the decree should be manifestly wrong, so wrong that the circuit judge could see in an instant that the Commission had made a serious error on the facts or the lawunless that be the case, that decree shall be in force and effect until the Supreme Court of the United States reverses or affirms it.

Senator CLAPP. On appeal to the Supreme Court, the court is not authorized to suspend the operation of the order of the Commission. Mr. DAISH. The Supreme Court can not suspend it?

Senator CLAPP. No.

Mr. DAISH. But after the decree, there are two ways of changing it— one is that the Commission itself shall modify the decree; whereas by the Nelson-Corliss bill the circuit judge alone has power to suspend the operation of the decree.

Senator CLAPP. If the circuit judge were vested with power to sus

pend the decree, what would you say as to giving the Supreme Court the same power on appeal from the circuit court?

Mr. DAISH. In all right and justice, manifestly I should say the Supreme Court, being the appellate body, and there being no review of its decision, might well be invested with authority to make the change upon proper showing.

SENATOR CLAPP. If the circuit court suspended the order, then it would remain suspended until ordered back into effect by the circuit

court.

Mr. JONES. By the Supreme Court?

Senator CLAPP. No; by the circuit court. If the circuit court sustains the order, then the order would be in effect pending appeal to the Supreme Court; and, there being no power in the Supreme Court to suspend it, the circuit court in the first instance could have suspended it when it heard the case.

Mr. JONES. The Supreme Court certainly ought to have that power as well as the circuit court, in my opinion, if they find that it is not just and right.

Mr. BACON. One objection to that is the long delay in adjudicating the case. The carriers avail themselves of every possible means of protracting litigation.

Senator CLAPP. You do not understand the point. This bill, called the Nelson bill, provides that on an appeal to the circuit court the circuit court may, if it deems it wise, suspend the operation of the order of the Commission, provided there was a proper case of complaint and the Commission found that the law was plainly violated. While this same law gives an appeal to the Supreme Court, yet it does not give the Supreme Court that same power which the circuit court has in a given case to suspend the operation of the order of the Commission.

Mr. BACON. That is just as I understand it.

Senator CLAPP. If one court has that power, why should not the other and higher court have it?

Mr. BACON. The objection is that it affords still further opportunity for the suspension of this order which has been found by a competent and skilled body to be necessary in order to do justice.

Senator CLAPP. Then why not give it in the first instance?

Mr. BACON. As a check upon the Commission.

Senator CLAPP. Surely the Supreme Court is as safe to be intrusted with discretionary power to suspend or enforce an order as is the circuit court.

Mr. BACON. But after the circuit court has confirmed the order of the Commission it would seem as if the carrier were sufficiently protected. It would take probably a year to reach the case if carried to the Supreme Court, and it may be delayed a year or two longer by motions and arguments and the like, and then there would be two or three years of additional delay, during which time this unjust rate, which has been so found by a competent body and confirmed by the circuit court, is in effect, and the public must suffer until the final decision is reached.

Senator CLAPP. If you vest the circuit court with power to suspend the order of the Interstate Commerce Commission, it seems a forced construction not to give as safe a tribunal as the Supreme Court that same discretionary power.