From the Library of the Late ROBERTS WALKER Friend and Partner of Justin DuPratt White (.Cornell 'go) Presented to Cornell University In Memory of That Relationship by MR. WALKER'S FAMILY CORNELL UNIVERSITY LIBRARY 3 1924 094 083 692 Cornell University Library The original of tiiis book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/cletails/cu31924094083692 HEARINGS BEFORE THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE OF THE HOUSE OF REPRESENTATIVES ON BILLS AFFECTING INTERSTATE COMMERCE Part XVIII WASHINGTON GOVERNMENT FEINTING OFFICE mo COMMITTEE ON INTERSTATE AND TORBIGN COMMERCE, HOUSE OF REPRESENTATIVES. JAMES E. MANN, Illinois, Chairman. IRVING P. WANGEE, Pennsylvania. WILLIAM M. CALDER, New Yokk. FREDERICK C. STEVENS, Minnesota. CHARLES G. WASHBUEN, Massachusetts. JbHN J. ESCH, Wisconsin. WILLIAlt C. ADAMSON, Geokgia. CHARLES E. TOWNSEND, Michigan. WILLIAM RICHARDSON, Alabama. JAMES KENNEDY, OHIO. CHARLES L. BAETLETT, Georgia. JOSEPH E. KNOWLAND, California. GORDON RUSSELL, Texas. WILLIAM P. HUBBARD, West Viroinia. THETUS W. SIMS, Tennessee. JAMES M. MILLER, KANSAS. ANDREW J. PETERS, Massachusetts WILLIAM H. STAFFOED, Wisconsin. BILLS AFFECTING INTERSTATE COMMERCE. Committee on Interstate and Foreign Commerce, House of Eepresentatites, Washington, D. C, Tuesday, February 15, 1910. The committee met this day at 10 o'clock a. m., Hon. James R. Marni (chairman) presiding. The Chairman. Any gentleman, in reference to the interurban roads, may proceed. STATEMENT OF ME. lEWIS S. CASS, PRESIDENT OF THE WATEE- LOO, CEDAE FAILS AND NOETHEEN EAILWAY, OF WATEELOO, IOWA. The Chairman. You wish to be heard in reference to the provision in the Townsend bill (H. R. 17536) excepting interurban railroads from the operation of the bill? Mr. Cass. Mr. Chairman and gentlemen, I will try to ;take up as little of your time as possible; but first I want to go on record as say- ing that I am thoroughly in accord and sympathy with the interstate- commerce law as it stands and as it is proposed to be amended in so far as giving the commission the right to establish through routes, joint rates, and joint classifications are concerned. Without this right a great many communities would suffer for the want of equal and fair freight rates, as between communities located upon snort lines of railroad and communities located upon trunk lines of railroad. This I regard as equally true so far as waterways are con- cerned, and I don't think there is any question but what it is true so far as any railroad is concerned, regardless of what the motive power may be. I know a great many different interurban railroads through- out the country — in fact, I know of no interurban railroad in the State of Iowa, of which State I am a resident, that does not do what you might term a commercial railroad business; but yet in every sense, so far as their passenger business is concerned, they are an interurban electric passenger railway, and it seems to me they are a form of railway which you propose to exclude from the right of the enforcement of joint rates and through routes with steam-connecting carriers. Most of the electric interurban railroads that to-day have joint rates and through routes with steam carriers, with a few exceptions, would be deprived of those rates as soon as they lost the power to enforce those joint rates, and to deprive them of those joint rates would deprive a number of communities from the equal chance at their markets with the communities located in adjacent and corres- ponding stations upon trunk lines of railroads that are dependent 1027 1028 BILLS AFFECTING INTEKSTATE COMMERCE. upon the market town for their produce and wares, and an equal chance to ship their grain, live stock, and so forth. In discussing this bill with different pair ties — I don't know just what is intended to be covered hj excluding electric interurban passenger railways from those which the commission may order rates in connection with steam roads. It may be possible that I am taking up the time of you gentlemen unnecessarily, and that I am laboring under a misapprehension as to the intention of this bill, but it is so vitally important to the property which I represent and to the properties which are known as interurban railroads throughout the State of Iowa that to withdraw from those railroads their freight traffic and their right to through routes and joint rates would work a great hardship upon a number of communities that are served only hy these interurban railroads and would, I fear, reduce the earnings of these interurban roads to such a low point that it would be impos- sible for them to operate as independent lines. Mr. Baktlett. You are engaged in the business of operating interurban roads ? Mr. Cass. Yes, sir. Mr. Baktlett. In the northwestern country and also in the eastern part of the United States; I am familiar with that; they handle a part not only of the interurban traffic and travel, but they carry passengers and freight; also sleeping cars, do they not? Mr. Cass. Yes, sir; there are interurban roads that are r unning sleeping cars for passengers, and I believe that Congressman McKin- ley's roads down in Illinois run sleeping cars for passengers. Mr. Baetlett. How about freight? Mr. Cass. The roads in Iowa transact the same character of a general freight business as any steam railroad in the State, excepting that they are not so long and do not reach the territory or do not reach the market towns; for instance, Chicago is the market town for the State of Iowa. The roads to and from Iowa built up by the steam railroad companies were built for the purpose of giving the steam roads the longest haul, and for the purpose of making Chicago the nia,rket town. These roads built their lines up to carry the products from Chicago to the people out in Iowa, and load their cars in Iowa with grain and live stock and bring them back to Chicago. Those roads originally were built for the purpose of moving traffic in that manner. The six trunk lines which cross the State of Iowa were sO' far apart that the markets became hard to reach by the settlers, so the people of Iowa have invested their money in right-angle roads, or railroads running across the State at right angles, communities have been established on those short-line railroads, and in order that those communities might thrive, they had to send their products to Chicago, the market town, and they had to receive from Chicago the wares that are sold at Chicago; and in order that they might receive those in competition with the trunk lines, or the communities located upon the trunk lines of railroad, they must have substantially the same rate as the communities located upon the trunk lines. Compe- tition enforced that condition of those rates in the early days with the six trunk lines across the State of Iowa. Mr. Adamson. Mr. Cass, I am not responsible for any part of this bill, and I have not been selected to explain any of it, but my under- standing is that the reason for the exception of these lines is that BILLS AFFECTING INTERSTATE COMMERCE. 1029 some of these railroads were not equipped to assume the responsibili- ties of the interstate commerce law, and that therefore they were to be exempt for awhile. Now you say that they are ready for it, and wish to be included in the provisions of the bill. Mr. Cass. I say that the Waterloo, Cedar Falls and Northern Rail- road, of which I am president, is ready for it, and is equipped for it. They considered themselves as subject to the interstate commerce law for two, three, or four years past, and have but recently submit- ted their auditor's office to a careful search on the part of the auditors of the Interstate Commerce Commission. The Chairman. I think perhaps it would be well for me to read to the committee the provision that you have reference to. The pro- vision which you are discussing in the Townsend bill is found on page 18, beginning on line 20, and reads as follows: The commission shall not, however, establish any through route, classification, or rate between street, suburban, or interurban electric passenger railways and railroadB of a different character. Of course that only refers to the establishment, I judge, of the through route. Mr. Adamson. It is doubtful whether it would be held to apply to his road at all. Mr. Cass. That is the provision; yes. Mr. Adamson. I mean as to whether the exception would apply to his road at all. Mr. Stevens. Have you had any conferences with the Attorney- General, or with the chairman of the Interstate Commerce Commission, who is somewhat responsible for the drafting of this Townsend bill ? Mr. Cass. No, sir. Mr. Stevens. Do you know whether or not that provision which was read was made with reference to your line, the lines in Iowa, Ohio, Indiana, or lines in New England controlled by the New Haven Eoad? Mr. Cass. I do not. I have been unable to determine why that provision was injected in the bill. Mr. Baktlett. So far as passenger traffic is concerned, these inter- urban railroads, even in New England, are in a very considerable part used by passengers in traveling from one city and State to another, are they not? Mr. Cass. Yes, sir. Mr. Bartlett. A man may go from New York to Portland, Me., on one? Mr. Cass. Almost, I believe. Mr. Bartlett. He certainly can go from New York to Boston. Mr. Cass. Oh, yes. Mr. Bartlett. And you think that those roads, having become, as you claim them to be — and doubtless correctly — now under the general terms of the Hepburn bill, and subject to control and regula- tion by the Interstate Commerce Commission, and this being a bill to amend or alter or increase the powers of the Interstate Commerce Commission, that they ought not to be specially excepted by being taken out from the general term of "railroads" conducting a pas- senger and freight trafiic ? Mr. Cass. Yes, sir; that is just what I think. 1030 BlliiS AFFECTING INTEKSTATE COMMEECE. Mr. Washbukn. Your remarks would also apply, would they not, to lines 15 to 18, inclusive, on page 26 of the bill? Mr. Cass. I don't see where that part of the bill can materially injure the class of railroads that I represent. If it is deemed wise to permit combinations on the part of electric railroads to be formed, and to permit steam railroads to use electric railroads as holding companies in consolidating steam railroads, I don't know that we can complain; but if I was the other fellow I would want that taken out, to be frank with you about it. Mr. Stafford. What are the reasons for your advocating this laeing eliminated if you are in an opposite position? Mr. Cass. I don't believe that the transportation in the arteries of commerce in this country ought to be so consolidated that they will be brought into too narrow a scope of management. I don't believe that our railroads and transportation companies ought to be con- trolled by a few people. I think that competition is necessary for the welfare of the business of the public along lines of transportation, not on account of rates, but on account of accommodations that competitors will furnish even at the same rates. That is why I say that if I was not in the railroad business I would not want the clause to remain in the bill. Mr. Washbuhn. Do you think that the steam railroads and the electric railroads should be kept separate and distinct as competing factors in the transportation business? Mr. Cass. Yes, sir; as much as steam railroads should be kept separate. Mr. Washbuen. As a matter of public policy? Mr. Cass. As a matter of public policy; yes. I believe that to be for the best interests of the public. The Chairman. Mr. Cass, to take a specific case, where an electric road has been constructed paralleling a line of steam railroad to within a few miles of a station in a large city, you want the law so that the Interstate Commerce Commission shall have, the power to make the steam railroad enter into a joint rate with the electric road, a,nd yet forbid the steam railroad from acquiring that electric road. ■The electric road would probably become practically a feeder of the steam railroad, and would not the facilities to the public be rather enhanced if the steam railroad should acquire the electric road? Mr. Cass. I would have to answer that question by a little further explanation, if I may make it. The Chairman. Certainly. Mr. Cass. Let us take as an illustration the Elgin, Aurora and Chicago Electric Railroad, which goes to the city limits of the city of Chicago, and reaches a large population in the minor cities surrounding Chicago. Now, those cities use Chicago as their market town, the principal part of the business to and from those cities is to and from Chicago. But I don't understand that it is the intention of the Interstate Commerce Commission, or of the Government — the law- making power — to attempt to regulate state rates; that is, I don't see tjiat this bin would affect the question of joint rates in that instance. It seems to me that that would be entirely regulated by the Illinois state commission and by these Illinois rates. The Chairman. Let us see whether it would or not. That electric road is wholly within the limits of the State of Illinois, and it would BTULS AFFECTING INTERSTATE OOMMEEOE. 1031 still be within the limits of the State in order to get into the city of Chicago. Suppose they should enter into an arrangement with you in Iowa for a joint rate from the west end of Iowa to the city of Chic9,go, woiildn't that compel them to make an arrangement by which they could carry passengers into the city of Chicago from Iowa? Mr. Cass. That would be true as to the passengers, but the pas- senger rates are principally based throughout the country upon 2 cents a mile, and with the exception of where short-line rates are made, it is not necessary that jomt passenger rates be ordered; it is not necessary that the commission be given permission to order joint passenger rates. The Chaikman. But that is what we are proposing to do, to give them that authority, and that is what you are advocating. Mr. Cass. What I am advocating is principally freight rates. The question of passenger rates is not an important question in this at all, and if I am taking up your time on a question of passenger rates entirely, then I want to apologize, because I assumed that, of course, it would cover freight rates. Mr. Adamson. As to that phrase "different character," as applied to those roads — that is, between roads of a different character, if the gauge is the same, the track and the coupling apparatus can Ibe adjusted, and the braking system can be adjusted — what is the reason that they are not nearly enough of the same character as to make this arrangement feasible? Mr. Cass. The only reason that I can assign to that is that the State of Iowa, through its supreme court, has declared that the rail- road of which I am the president is an interurban railroad, and if the Supreme Court of the United States should hold the same thing, based upon the decision of the supreme court of Iowa, then we would be shut out under this bill. Mr Adamson. But this is an exception, as between your road and railroads of a different character, meaning the steam railroads. Mr. Cass. Yes. Mr. Adamson. Now, if that class of interurban street railroads that you speak of is, by their equipment — their phvsical equipment — sufficiently within the character of the steam railroads, what is the reason they practically are not in the same character? Mr. Cass. They should be, and they are, as a matter of fact. Mr. Adamson. ' If they have the same gauge, the same adjustable couphng arrangement, the same braking arrangement, what is the reason they are not sufficiently in the same character to be coupled on? Mr. Cass. They are; but what the courts would say, as meant by this bill, should it be left with the present wording, is another matter. Mr. Stafford. What is the character of your freight equipment on interurban railroads as to the gondola cars and the box cars ? Mr. Cass. The Waterloo, Cedar Falls and Northern Railroad owns 150 cars. Seventy-five of those cars are built under the Master Car- builders' steam road specifications, are interchangeable with any railroad in the United States, and our freight equipment comes and goes to the other railroads as freely as theirs go and come to our line. 1032 BILLS AFFECTING INTBESTATE COMMERCE. Mr. Stafford. Is it the practice at present to interchange cars with other railroads without the necessity of transferring shipments to the coimecting railroads at the connection point ? Mr. Cass. It is, so far as interurban railroads of Iowa are concerned. The character of the interurban railroads of Illinois I have not care- fully investigated, but we have a number of interurban railroads in Iowa, and all of them transact a general commercial railroad business along the same line as the steam railroads, and in addition to the general commercial business they transact an interurban passenger railroad business. But in the instance of our company, and of other companies, they transact street railroad business upon the streets of some communities. Mr. Stafford. Then the railroad carriers in Iowa send their own cars of freight over your lines ? Mr. Cass. Yes, sir. Mr. Adamson. Then the only feature, it appears, in which the characters are different is that, while their engines could run on your tracks, your engines could not run on theirs because they haven't the electricity? Mr. Cass. That is the point exactly. Mr. Adamson. And is that material to the question of sending cars back and forth? Mr. Cass. Not at all. The Chairman. How many freight cars have you on your hne? Mr. Cass. Seventy-five cars of the master carbuilders' standard, and of that 75 cars 45 of them are interchangeable freight cars in the §eneral line of freight business; that is, they go all over the United tates, and at times they are gone for as long a period as two years before they come back to our line. The Chairman. Forty-five freight cars; is that the total number of freight cars that you have? Mr. Cass. That is the total of freight cars that we send out on other lines. We have six steam locomotives. The Chairman. How many miles of track have you? Mr. Cass. We have 50 miles of track that we operate as a commer- cial railroad. The Chairman. You have a little less than a freight car to a mile, thent Mr. Cass. Yes, sir. The Chairman. Do you think that is a fair proportion, if steam railroads were to be compelled to interchange business with you? Mr. Cass. I think it is a greater proportion than the average small steam railroad owns. The Chairman. Less than a freight car to a mile? Mr. Cass. Yes, sir. The Chairmai^. Have you any information upon that subject? Mr. Cass. I have looked it up; and I might say for your informa- tion, sir, that I have just retired as an executive officer of a large steam trunk line, and that I have come in contact with that situation in connection with the interurban lines and with the small steam railroads; and I know from experience that the average electric railroad which is attempting the business of commercial railroading is better equipped in nearly every respect to serve the public than the average small steam railroad. BILLS AFFECTING INTERSTATE COMMERCE. 1033 The Chairman. Now, how many miles of electric interurban roads are there in the United States? Mr. Cass. I should say about 38,000. The Chairman. How many freight cars have they? Mr. Cass. In the United States — I couldn't say offhand; I would have to look that up.. Do j^ou mean for the interurban roads? The Chairman. Yes. Mr. Cass. I should say that the interurban roads have not any- thing like one freight car to the mile. The Chairman. Do you suppose that they have 3,800? Mr. Cass. No ; I should think not. The Chairman. That would be less than one in ten. Do you think it would be perfectly fair to require the steam railroads to interchange freight with the interurban roads, the steam railroads to furnish practically all of the freight cars? Mr. Cass. I think it would be just as fair as it is to require them to interchange traf&c with water transportation companies. The Chairman. That is the question. That question is to be dis- cussed by some other people. What I wanted to get at was your view on this particular proposition. Mr. Cass. Yes; I believe that it would be. I believe that it is perfectly fair, and the reason it is perfectly fair is this : That for eight months every year the steam railroad companies have standing on their sidetracks idle railway equipment, box and freight equipment, that they would be very glad to push out on the electric lines and receive their per diem of 30 or 20 or 50 cents, whatever it is — it has varied three or four times in the last three or four years, and I don't remember it now, but I think it is 30 cents per diem for the cars. The Chairman. It is a pleasure to hear you say that, because we are so used to hearing shippers say that it is impossible to get cars for use over the railroads, and the railroads state that they are never able to furnish them because they can not get the money to purchase them with. Mr. Cass. That is true at certain seasons of the year. The Chairman. And yet at those seasons of the year you want to require them to turn their cars over to the electric roads, although the electric roads furnish no corresponding equipment for it? Mr. Cass. No, sir. I do not want to require them to turn them over to the electric roads at all, if it is not to the interest of the steam roads, the electric roads, and the public; and if the car can not be taken out on the electric road and unloaded as quick or quicker than transferred at a junction point The Chairman. There is nothing in this bill to prohibit an electric road and a steam road making an amicable arrangement where it is to the interest of both of them. The question is whether we should force the steam road to turn its freight cars over to the interurban road for the benefit practically of the electric road, and although they furnish no corresponding equipment. Mr. Cass. This bill is not alone for the purpose, as I understand it, of enforcing joint rates and through routes between trunk lines of railroad, but it is for the purpose of protecting the communities upon the short-line railroads that the trunk lines would not otherwise pro- tect. I wish to call your attention to a complaint that has been very recently filed before the Interstate Commerce Commission, known as 1034 BILLS ATFEOTING INTEBSTATE COMMERCE. the "Interstate Commerce Commission's docket No. 3080," in which the Tennessee Central Railroad, a small railroad in the southern part of the United States, complains because the Southern Railroad and the Illinois Central Railroad, their principal connections, are endeav- oring to enforce an unfair settlement of a claim against the Tennessee Central RaUroad, and are withdrawing and cancelling the through routes and through rates with the Tennessee Central Railroad Com- pany, which has had the effect of increasing the rate to every commu- nity located upon that short line of steam railroad. Now, if the Tennessee Central Railroad Company could not appeal to the Interstate Commerce Commission, where would the commu- nities be? How would the communities be situated on that line of road, and how would they get protection for the money invested? Now, suppose the Tennessee Central Railroad were to string a trolley wire over the entire length of the line, but in every other respect to remain the same as it is now, why should the fact of that trolley wire being over the Tennessee Central Railroad deprive it of the right to protect itself, the shippers, and the public located along that line of road, by appeal to the United States Government for the purpose of rectifying things of that nature? Why should a railroad, because it has a trolley wire over it, and which furnishes more adequate service, both passenger and freight, switching and everything else, to the pub- lic located along its line, be deprived of the right of appeal to this tribunal of justice, you might term it, as between competing railroads? It is not for the purpose of enforcing through rates with trunk lines that this bill is being introduced, but it is for the purpose of protecting the small steam railroads. Why is not the small electric railroad entitled to the same protection if it transacts the same business? The Chairman. You have a very different idea of the purpose of this bill from what I have. I have never heard the suggestion that you have made before, as to the purpose of the bill. Mr. Cass. That is my understanding of the bill. The Chairman. Oh, I do not say that you are not right. Mr. Cass. That would be its operation most certainly. Mr. Richardson. The paragraph in reference to street railroads reads as follows : The commission shall not, however, establish any through route, classification, or rate between street, suburban, or interurban electric passenger railways and railroads of a different character. Do you want that stricken out? Mr. Cass. I want to strike that out; yes, sir. Mr. Richardson. Don't you think to strike that out would give the great railroad systems a wonderful power over the electric rail- roads ? Mr. Cass. Leaving that would give them the wonderful power. If it is stricken out, whenever an electric railroad is in a position to serve a community commercially, then the community can make application for service, and if the steam railroad, the connecting line, refuses to grant that rate, we can appeal. Mr. Richardson. Do you think that the commission ought to have power to create through routes between the steam railroads and the electric railroads of the country? Mr. Cass. The question of routing the car, the question of the character of the car, I don't see enters into it at all. It seems to me BILLS AFFECTING INTERSTATE COMMERCE. 1035 that it is a question of ability; the construction, the character of a railroad's traffic, and the communities that are interested along the railroad. The question of rolling stock is another matter. An business that you move across this great country is not moving ill through cars. The Chicago, Burlington and Quincy Eailroad every fall places an embargo on the railroad from which I have just retired as vice-president, a trunk-line railroad, and we were obliged to send our cars, our own cars, around to Omaha, standing alongside of the Burlington and transfer grain into our own cars in order to move it on to the market. There is no more reason why you should not trans- fer the shipment from the cars of the steam railroad to the cars of the electric road equally as well as you can transfer them from the cars of the steam railroad to the barges of a water line. But the communities located upon that electric railroad who are doing business — buying stock, shipping grain, doing the same character of business that is done on steam railroads — should not be deprived of the right to reach the market towns upon the same basis of rate as the man who is located upon the trunk-line railroad which was originally built through to the market town. That is the point, and that is the position we will find ourselves occupying if you leave that in the bill. And I know whereof I speak, because I have sat in the councils of the steam railroads for years in executive meetings. The Chairman. What road were you connected with? Mr. Cass. The Chicago Great Western. The Chairman. That was a Stickney road? Mr. Cass. Yes; I retired on the 1st of September, 1909. The Chairman. That is the thorn in the side of the railroads? Mr. Cass. I was one of the thorns. I have sat in the councils of trunk-line railroads while vice-president of the Chicago Great Western, and have been ostracized from good railroad society because I would not refuse rates with connecting railroads that were operated by electricity. That is what I have done, and I know whereof I speak. I know that if this clause is left in the bill the communities on the electric lines of railroad will suffer from lack of adequate railroad facilities and adequate rates. Mr. Richardson. If that clause is left in? Mr. Cass. Yes, sir. Mr. Richardson. Simply because they have no place to appeal to? Mr. Cass. Yes, sir. We have here the presid/ent of the Cedar Rapids and Iowa City Electric Railway, a road which runs from Cedar Rapids to Iowa City through Linn County, a county in which a small steam railroad of 19 miles in length has also been constructed, and he was obhged to appeal to the Interstate Commerce Commission in order to get through routes to the communities located upon his line of railroad, notwithstanding the fact that he has four or five inland communities that are thriving trading posts located upon the line of railroad, and the little 19-mile steam railroad, which only had half as many people located upon it, only cost half as much, and only furnished less than half as good service to the pubUc, was granted through rates, and why I don't know; but probably because some fellow, somebody, told some hired man of the trunk-hne railroad that he ought not to make rates on the electric railroad, and so they did not. 1036 BILLS AFFECTING INTERSTATE COMMEBOE. Mr. RiCHAKDSON. Your idea is that the same control should be exercised by the Interstate Commerce Commission over the interurban railroads as the steam railroads of the country? Mr. Cass. Yes, sir. Mr. Richardson. And that the same rules and rates and regula- tions, and everything else of that kind that apply to steam roads should apply to the electric roads ? Mr. Cass. Exactly; precisely. Mr. Richardson. Then wouldn't you put into the hands of these great railroad systeras, as compared to the electric railroads, over- whelming power and strength, and could not they absorb and destroy and break down these short electric lines? Mr. Cass. I don't see how they can do it. Mr. Richardson. It would be the greater controlling the lesser. Mr. Cass. But mark you, if an electric railroad has the earning power to pay its fixed charges and maintain itself in a healthy con- dition, then the only way the steam railroad can break it down is by buying up its stock and absorbing it. But if you place in the hands of the steam railroad the right to refuse to permit the electric railroad to enjoy through routes and through rates, and to draw the products that are along its line of railroad to the connection with the steam railroad who participates in the rates, then you have placed in the hands of the steam railroad a power of breaking down that electric railroad, or reducing its earning power, and of destroying its com- munities commercially. Mr. Richardson. It looks to me that the electric-railway system being apparently so absolutely different in so many material and physical manners, that if it is governed it ought to be governed on an entirely different system from the steam railroad. Mr. Cass. Not at all. It is not the intention of this bill that the commission shall go throughout the country seeking places to make joint rates and through routes without complaint, but it is, as I understand it, the intention, and is the law at the present time, that the commission has the right to investigate the complaints, and if upon investigation they find that the carriers are entitled to be re- garded as through routes with joint rates and the interchange of busi- ness already established, then why not leave it that way ? That is all we ask. We don't ask you to do anything more to protect, but don't take anything away from us; that is all we ask. Leave us where we are. Mr. Stafford. Have these electric railway lines in Iowa been equipped with freight equipment from the time of their organization ? ' Mr. Cass. Yes; all of tne electric lines that are known as "interurban railroads" in Iowa were originally built for the purpose of transacting a commercial railroad business in addition to the passenger business. Mr. Stafford. For what purpose do you use the steam locomotives on your line ? Mr. Cass. Largely in constrviction work, and opening the road of snow in the winter time. Mr. Stafford. Do you use them at all in connection with the haul- ing of freight ? Mr. Cass. Yes, sir; at times when business is very heavy; at certain seasons of the year when business is heavy on the line of road. If we haven't sufficient electric equipment to care for the movement BILLS AFFECTING INTEBSXATE COMMERCE. 1037 of the business, then we put the steam locomotives in the service, either upon passengers or upon freight. Mr. Stafford. Under your franchise you are permitted to use any kind of power in the propulsion of your trains, whether steam or electric or other motive power ? Mr. Cass. Under the city franchises we have no right to run steam locomotives upon the streets, but we own independent terminals for our commercial business ; we operate freight houses, switching lines, and own a railroad built upon a private right of way reaching the center of the city of Waterloo, a town of 30,000 people. Mr. Stafford. So where you operate your short lines it is virtually a railroad in all respects, with the privileges of operating by steam or any other motive power that you may elect ? Mr. Cass. Exactly so. The Chairman. If you have an interurban road that runs through a town, or the main street, say, where the city council has granted a franchise under the state law for the conduct of passenger business, and the Interstate Commerce Commission orders you to make a joint rate with a steam railroad to carry freight business through that town, what would you do in that case? Mr. Cass. I don't believe that the commission would make the order if the character of the road was such as it was not possible to comply with the order. The Chairman. That is the q^uestion, whether it would not be possible — the power of the council over interstate commerce. Mr. Cass. Well, sir I would have to refer you to a lawyer. I do not believe I could answer. The Chairman. Take, for instance, the city of Chicago : There is the City EaUway Company down town, and the City Railway Company connects with the South Chicago City Railway Company, which runs from Sixty-third street down into Indiana, thereby making an inter- state road or connection. The City Railway Company down town is only authorized to carry passengers and mail, but supposing the Interstate' Commerce Commission orders those two roads to form a joint route, the steam railroad in Indiana under this proposition to carry freight, what will be done? Or, must the commission, before malang the order, ascertain the wishes of the city council of every town through which the road passes? Mr. Cass. I think that the commission, before it makes an order, does investigate all of the circumstances surrounding the question involved. Now, of course, what the effect would be if the commis- sion would make that order might, I suppose, be the same effect of any Government order that might be made affecting the rights of States and municipahties in States. That is getting me into the woods. I am not an attorney, so I don't know what the result would be. The Chairman. Isn't it quite a common thing for cities to grant the right to a street railway company or interurban railroad company to run on the main streets for the purpose of doing a passenger business and not a freight business ? Mr. Cass. Yes, sir; that is very usual. Now, understand, I am not here advocating that all interurban railroads are able to transact a commercial railroad business in connection with the steam railroads. 1038 BILLS AFFECTING INTERSTATE COMMERCE. The Chairman. No; but you are advocating a proposed law that shall give the Interstate Commerce Commission power to compel them to. Mr. Cass. No, I am advocating the proposition that you shall not take away from the Interstate Commerce Commission the power that they now hold. The Chairman. Oh, no; I beg your pardon; you go further than that. We are not proposing to take away any power the Interstate Commerce Commission now has. Mr. Cass. It now has the power to order those roads, and is doing it. The Chairman. It now does not have the power to order a rate anywhere where an existing joint rate exists. Mr. Cass. Exactly. The Chairman. That practically covers their case. But here is a proposition to give to the Interstate Commerce Commission a power to order a joint rate wherever it pleases, regardless of an existing joint rate, and the exception is only from that; so it is not the propo- sition to take away that which it now has, but a proposition affectmg a power it is proposed to confer. The position to which you apply is that they may, after hearing or complaint, or on their own initiative without complaint, establish through routes, joint rates, and so forth. That is a change of the existing law, broadening and increasing the power of the commission, and the exception is to that. Mr. Cass. Well, why discriminate? The Chairman. I am not arguing the merits of this proposition; I am trying to get information. Mr. Cass. Let me cite this (reads) : The commission shall not, however, establish any through routes, classification, or rate between street, suburban, or interurban electric passenger railways and railroads of a different character. The Chairman. I don't think they ever have established through rates. Mr. Cass. They have in the State of Iowa, and the president of the company who made the complaint before the commission sits here, and I testified before that commission in connection with the establishment of those rates, and the commission did establish the through route and the through rate under the laws as thfey now exist. This was done in connection with an interurban railroad and a steam railroad. The interurban railroad was the Cedar Rapids and Iowa City Railway, and its president is with us to-day. The steam rail- road was the Chicago and Northwestern Railway, and Commissioner Clark is the commissioner who sat at the hearing. The Chairman. The Iowa commissioner. Mr. Cass. No, sir; Commissioner Clark, of the Interstate Com- merce Commission. The Chairman. Well, I say it was the Iowa commissioner. Isn't he from Iowa ? Mr. Cass. I think not. Is he? The Chairman. Yes; a credit to the commission and a credit to the State of Iowa. Mr. Stafford. I wish to direct your attention to the phraseology in the clause just read, and ask you whether, under the present phraseology, it would exclude that part of your electric railroad which IS operated as a freight line. As I understand it, you have two differ- BILLS AFFECTING INTERSTATE COMMEKCE. 1039 ent characters of railroad in connection with the operation of your system, one where it is Umited exclusively to passenger travel, where it goes through the cities, and another where you have a special fran- chise that gives you the privilege of operating it for freight purposes. In the latter instance this phraseology would not exclude this line from the jurisdiction of the Interstate Commerce Commission, because the phraseology, as I read it, is liinited to interurban electric pas- senger railroads and not interurban electric railroads. Mr. Cass. We, of course, as I stated before, have been declared to be an interurban railroad. That declaration was made by the supreme court of the State of Iowa. Mr. Stafford. But this limitation applies only to interurban elec- tric passenger railways, and not to interurban electric railroads, which have the privilege of operating both passenger and freight, like any other railroad. Mr. Cass. But why not? The point comes back to me constantly: Why eUminate from the power of the commission the control over the electric railroads as the interests of the public demand? Mr. Stafford. I understood you to contend that you' did not wish to grant to the Interstate Commerce Commission the right to estab- lish through rates over interurban electric passenger railways. Mr. Cass, Yes; I do wish to grant them that right if the public demands, and if the interests of the public demand that that should be granted. Mr. Stafford. I misunderstood your contention, then. I under- stood that you did not wish to confer jurisdiction so far as passenger rates were concerned, but you did wish to extend it for freight rates. Mr. Cass. In my opinion — I may have misspoken myself, but to make myself clear I will make this statement: Ihat, in my opinion, it is in the interest of the public that the Interstate Commerce Com- mission have such jurisdiction over all transportation companies that the needs of the public may demand upon investigation, regard- less of the character of the motive power used, or regardless of the character of track it runs over, or whether it is a waterway or not, I believe that the interests of the public demand that. Mr. Stafford. I don't think that this bill in anywise excludes from the control of the Interstate Commerce Commission those characters of railroads which are operated by electricity; for instance, the Long Island City Kailroad, and lines out West, where they are operated by other than steam power, because they are included as railroads — as railroad carriers, but that an exception is sought to be made so as not to include exclusive electric passenger railways which are not engaged in freight, carriage at all. Mr. Cass. Conceding that you are right, of what benefit can that clause in this bill be to anyone other than the trunk-line steam rail- roads ? I have not been able to see since I read that clause Mr. Stafford. I can readily understand the reason for a distinction between electric passenger railways, exclusively confined to that char- acter of travel, and railroads which are engaged, whether operated by electricity or steam power, in both freight and passenger business. For instance, in my home city, Milwaukee, we have an interurban service, but there is no connection whatsoever in the operation of its passenger travel between it and existing railroads. It, is a separate system entirely. There are no freight rates which are called upon to 1040 BILLS AFFECTING INTEBSTATE OOMMEBOE. be established in the interUrban communities throughout the country- over any territory which is on the line of the interurban railroad. Mr. (JAss. Taking that view of it, and assuming that that is true, suppose that it is to the interest of some community — suppose that later on some community finds that it is greatly to its interest to have a freight business done upon a portion of the Milwaukee interurban line. Does it do any harm that there may be a body of men who should have the right to review Mr. Stafford. I take a different position from what you do, to the effect that this phraseology in nowise excepts that line of raihoads when it does do a freight business, because it is an electric railroad regardless of whether it is passenger or freight. Mr. Cass. Assuming that it is an electric railroad, a great many electric railroads in densely populated communities are entirely satisfied to operate their roads m order that they may go ahead and keep out of the government regulation or control. Ordinarily the fellow that is afraid of government regulation is the fellow that is liable to do something he ought not to do. We are not afraid. Mr. Stafford. I don't think there is really any dispute between us. I believe that the bill, as phrased, would give the Interstate Commerce Commission the authority to regulate, on through busi- ness, freight originating or dispatched on electric roads that do a freight business. Mr. Cass. But you put a clause in here which gives the other fellow a mighty good fighting chance to keep them from doing it. If the Supreme Coiu-t of the United States should hold as the supreme court of the State of Iowa has held in our case, we could not do the business. Mr. Stafford. You stated that you are not a lawyer, and of course it is a question of construction. Mr. Cass. That is it exactly. If the United States court should hold as the state court of Iowa has held in our instance, then the Watei;loo, Cedar Falls and Northern Railroad would be shut off from 40 per cent of its revenue; 40 per cent of the revenue of our road doing business in communities that have no other railroad. If it is not the intention or desire of the Government to interfere with that class of railroads, and if it is not intended that the mere fact of a trolley wire being strung over a track should not change the character of the railroad, the railroad that does the same character of business that the steam railroad does, and this committee sees fit to report a bill with an amendment so that that can not be misconstrued by the Supreme Court unless they construe it as to all railroads, then so far as our company is concerned, and so far as the interurban railroads of Iowa are concerned, we will be happy, contented, and satisfied. But I don't yet see why the Interstate Commerce Commission should not be given the right upon hearing, and upon finding the physical conditions of both the railroads equal in transacting business with the pubUc, to transact that business if the public demands it. Mr. Petees. You expressed the opinion that steam railroads should not be allowed to own stock in interurban railroads. Do ytju think that prohibition should not extend to cases where it is allowed by the law of a State, or do you think that should be an absolute prohibition? Mr. pASS. I think, on the broad principle of transportation, that consolidation in transportation, in competitive transportation, should BILLS APPBOTING INa?EESTATB OOMMEKOE. 1041 be prohibited wherever it is met and under whatever circumstances. I believe that the pubhc demands that condition; that the public welfare demands it. But I don't know that I can exactly answer your question to a closer point than that. That would be considering questions of constitutionality and of rights of States to govern, and so forth, and I would not know just what to say as to that. But I believe it should be prohibited wherever possible. Mr. Richardson. If I understand you correctly, if this parapraph is left in the bill, that affords the steam railroads a much greater and a better and more efficient opportunity to crush the electnc railroads than if it is stricken out ? Mr. Cass. Precisely so, and I think I speak advisedly, because I have gone through steam railroad practice from the position of a telegraph operator up to that of vice-president, and I have built an electric railroad. Mr. Adamson. It occurred to me that possibly in making your lines a part of a through route there might be diverted some busmess from a trunk line, ana it might diminish to some extent the revenue of the trunk line? Mr. Cass. Well, I can answer that in this way: That during my administration upon a trunk-line railroad, directing the commercial affairs of that railroad, I made it a practice to encourage the building of electric hnes, carriers, and connections, and I estabUshed with every electric line that was built along the line of the Chicago Great Western Railroad, while I was with that company, through rates and routes willingly, because I discovered that the benefit that the electric railroad brought , into communities, the added prosperity, added a great deal more to the trunk-line business than it took away from it. It has never been the practice on the part of trxmk lines, outside of the Chicago Great Western, to encourage the building of the electric lines, and the trunk lines have stoutly refused to make joint rates with electric railroads ever since I knew anything about it. Mr. Adamson. They might be available as feeders, but if permitted to become undesirable rivals, the trunk lines would not think them so valuable. Mr. Cass. I am perfectly willing to let the trunk lines take care of themselves, but I think the pubhc demands that they have the through routes. The Chairman. We have given you one hour, Mr. Cass, and we have some other witnesses here to be heard. Mr. Cass. , I shall be glad to yield whenever the gentlemen desire. Mr. Richardson. What is the mileage of the electric railroads of this country? Mr. Cass. I should say about 38,000 miles. Mr. Richardson. What is the capital stock? Mr. Qass. I should say about $2,000,000,000. Gentlemen, I thank you very much for your kind attention. 23738— PT 18—10 1 1042 BILLS AFFECTING INTERSTATE COMMERCE. STATEMENT OF MR. WILLIAM G. DOWS, PRESIDENT AND GEN- ERAL MANAGER, CEDAR RAPIDS AND IOWA CITY RAILWAY, OF CEDAR RAPIDS, IOWA. Mr. Dows. Gentlemen, I don't know that I have anything very much to offer in addition to what Mr. Cass has said, but from reading those few lines in this bill it does seem to me that that would be the means of withdrawing all through rates from interurban railroads. There seems to be a misapprehension on the part of some members of the committee as to what is meant when we saj "electric inter- urban railroads. " I am president of the Cedar Rapids and Iowa City Railway, a line of railroad from Cedar Rapids, Iowa, to Iowa Citjr, Iowa. It has its own freight terminals, both in Cedar Rapids and in Iowa City, which it owns. From these freight terminals it is built on a private right of way, 100 feet wide, and the rail and the con- struction is the same as of a steam railroad. Now, we are perfectly capable of handling any and aU kinds of freight in carload lots. The line bisects a quadrilateral, so to speak, which is formed by four roads; and we have towns on our line of road which are not served by any other railroad. In fact the nearest practical wagon route for one town is to Iowa City and Cedar Rapids, which would be 14 miles either way. We handle a great deal of freight, and when we built this road we endeavored to have the different railroads put in joint rates and through routes over our line, but they absolutely refused to do it. So we brought an action against the Chicago and Northwestern before the Interstate Com- merce Commission, and after a hearing which was bitterly fought and went over a series of months, the commission ordered the rates put in, saying that we were able to handle any and all kinds of freight. Mr. Stafford. What is the decision? Mr. Dows. The decision of the Cedar Rapids and Iowa City Rail- way V. The Chicago and Northwestern Railway. Mr. Stafford. When was it decided ? Mr. Dows. About a year ago; a little over. The Cbcairman. Is that joint rate in effect now? Mr. Dows. Yes, sir; but it is only in for two years, and the conse- quence is that if this bill passes they can withdraw it, and we do not think that would be fair; we have grain elevators, stock yards, and everything of that kind on our line of road. Mr. Kennedy. And you want these three lines stricken out? Mr. Dows. Yes; I think they ought to be. What harm would it do to strike them out? Mr. Richardson. The commission would pass upon the road com- ?etent and qualified to do business and apply the through rate, "ou think that discretion ought to Ije left in the hands of the com- mission, and that it would not be left there if this paragraph should be left in? Mr. Dows. Yes. Mr. Stafford. Do you consider your line of electric railway an electric passenger railway, which is the limitation carried in this clause? Mr. Dows. Now, the passenger revenue of the average interurban railroad is greater than the freight revenue. That is the reverse of BILLS AFFECTING INTEKSTATE COMMEECE. 1043 the steam railroads. For instance, on the Northwestern road, the passenger service is about 30 per cent of the gross and the freight service 70 per cent of the gross, and that is the reverse of the electric roads. Mr. Stafford. The revenue does not determine the character of the railway, but the character of the service. Mr. Dows. The reason why our passenger revenue is greater than our freight revenue is the character of the service we give. We give an hourly service. We stop anywhere along the line and pick up passengers with our passenger cars. The consequence is that that continuous service that we give practically all day long, for twenty hours of the day, makes our passenger revenue really greater than our freight revenxie, notwithstanding our freight revenue is as large as the average small road in the State of Iowa. ' Mr. Stafford. I suppose no one can guess what the constiruction of the court would be as to what would be meant by "passenger railway." Mr. Dows. I'don't think anyone could. Mr. Richardson. Is there not a very material difference between the construction of a steam railroad and that of an interurban rail- road, in the character of the rails used? Mr. Dows. No, sir; the type of the rail on our road is the standard for steam-railroad construction. Mr. Richardson. I thought the rails were much heavier on steam roads. Mr. Dows. No, sir; we use the standard section rails, the same as the steam railroads use, and our bridges are the same; our wooden bridges are exactly of the same type and the same plan as those upon the Northwestern, upon the Milwaukee railroad, or upon any other road. Mr. Richardson. You do not carry as heavy freight loads as the steam raUroads ? Mr. Dows. We handle cars of 110,000 pounds, or 55-ton cars. The Chairman. What weight rail do you use ? Mr. Dows. We use the T rail, 70 pounds to the yard. Mr. Richardson. That is unusual, is it not? Mr. Dows. No; the Fort Dodge, Des Moines and Southern Railway is the same, and the interurban railroads of Des Moines, Iowa, has the same class of construction. Mr. Richardson. As originally constructed and intended, the road was built for passenger traffic, wasn't it? Mr. Dows. It is not, no; because the population is not dense enough, but that they have to depend upon the freight business in order to exist. Mr. Kennedy. Do you have freight cars that you permit to go off of your line and go to their destination to be unloaded? • Mr. Dows. Yes, sir. We have tariffs over pretty near all of the different roads; we are in the different classifications, that is, of the trunk fine tariffs, and we handle the standard equipment exactly the same. We have a physical connection in Cedar Rapids with the Chicago, Milwaukee and St. Paul and the Chicago and Northwestern, and at Iowa City we connect with the Chicago, Rock Island and Pacific. 1044 BILLS AFFECTING INTERSTATE COMMEBCE. Mr. Richardson. Are you equipped with freight cars sufficient to meet the demands of traffic, or do you rely upon the steam railroads for those cars? Mr. Dows. We have some freight equipment of our own, but we have never found any difficulty in getting any amount of freight equipment that we want from the other roads. Mr. Richardson. That is where the steam railroads are complain- ing so much; about their cars? Mr. Dows. We have never heard any complaint; they have never made any complaint to us. These interurban railroads stand ready to buy the freight equipment whenever it becomes necessary. The Chairman. Would you object to a provision in the biU that if you interchanged business you should provide your proportion of equipment ? Mr. Dows. I don't think there would be any objection to that. The Chairman. Are the interurban railroads generally financially able to purchase the necessary equipment? Mr. Dows. Yes; any one of them can buy them on what we call the car-trust plan. Mr. Adamson. You are not to furnish cars for freight excepting that which originates on your line ? Mr. Dows. Say you have a car from the Illinois Central, you can load that back to the lUinois Central line. I use that merely as an illustration. Mr. Richardson. Suppose the lUiuois Central is the connecting link between two great railpoad systems; if you carry out your ideas fully, a car loaded on one of the steam systems could pass over your road to the connection and you would not object to that? Mr. Dows. We would be glad to have them. Mr. Stafford. What is the length of your line that is operated for freight purposes ? Mr. Dows. We caU it 27^ miles. Mr. Stafford. How many freight cars is it equipped with? Mr. Dows. I think we have twenty-odd cars, and they are all standards. Mr. Stafford. Have you any locomotives? Mr. Dows. No, sir. Mr. Stafford. Under your franchise you are permitted to use that kind of power? Mr. Dows. We can use anything of that kind; for instance, last fall there was a big football game between the Agricultural College at Ames and the university at Iowa City — Iowa City is the university town. We did not have electric equipment enough to handle the crowds, so I rented from one of the large trunk lines a complete steam train, with a passenger engine — even the engineer and fireman were furnished — and we operated that over the line. Mr. Stafford. How many freight cars are owned by the electric railroads in Iowa? Mr. Dows. I couldn't say. Mr. Stafford. Can you give us the mileage of the electric railroads in Iowa that are engaged in freight business? Mr. Dows. I should say 200 miles. Wouldn't you say that, Mr. Cass? Mr. Cass. Well, I should say between 200 and 300, but nearer 300 than 200. BILLS AFFECTING INTERSTATE COMMERCE. 1045 Mr. Stafford. The franchise under which you operate is different from the franchise in some other cities in that you have the privilege of using any kind of motive power? Mr. Dows. Yes; under the laws of Iowa they make no difference between an electric railway and a steam railroad. They are all organized under the same laws. But wherever the railroad or railway corporation or anything of that kind appears in the code, it is made applicable to railroads — ^what they call interurban railroads. The statute first defined that an iaterurban railroad was a road that ran from one town to another whose motive power was other than steam. Then it made everything apphcable to that. The Chairman. What would you say to this proposition in refer- ence to the issuance of stocks and bonds ? Would it iaterfere with the construction of new electric roads if they should be required to sell their stock at par? Mr. Dows. Well, I think it would. The Chairman. Do you want to come under the provisions of this bill? Mr. Dows. Well, we are wiUing to come under the provisions of the bUl; we are willing to take our chances. The Chairman. I know; still we would hke to know the effect of the bill. You have two or three hundred miles of electric road in Iowa, and there ought to be a great field for additional roads there. Mr. Dows. There is. The Chairman. It is not the custom of those roads to sell their stock at par, is it ? Mr. Dows. If they can. The Chairman. If we should prohibit them doing any other way, wouldn't it have quite a deletenous effect upon the construction of new roads ? Mr. Dows. I think that any law which would prohibit the issuing of any stock only at par and the sale of any bonds only at par would stop the building of roads. Mr. Adamson. Do you think they would pay any attention to any such a law if Congress attempted to prohibit it ? Mr. Dows. I tmnk they would have to if they did an interstate business, wouldn't they? Mr. Adamson. I thmk not. I would not be alarmed about the matter if I were you. Mr. Dows. In speaking of the handling of freight down through the city of Chicago, I want to say that the Interstate Commerce Com- mission could not order anything of that kind. The Chairman. Why not? Mr. Dows. Simply because they are not constructed to handle it, with switches and proper curves. You could not get a car weighing 100,000 pounds around a 50-foot radius curve. The Chairman. But it would not be necessary to have a car of that weight. They have been trying to get that road in Chicago for years. Mr. Dows. It is strange that they can not do it. The Chairman. They not only can get it through, but where they are permitted to do it they do do it. They could not handle a 100,000 pound car, perhaps, although their rails are a great deal heavier than the raUs of any steam railroads in the country, and their track is bet- ter constructed than any steam railroad track on earth. 1046 BILLS AFFECTIKG INTEBSTATE COMMERCE. Mr. RicHAEDSON. It is not true, is it, that all of these uiterurban railroads are operated in cities under the same character of construction as the steam lines? Mr. Dows. I do not know of an interurban railroad in the United States that is buUt with less than a 60-pound T rail, whether it is used clearly for passenger, or for passengers and freight. Mr. Richardson. Then the public generally has a wrong impression as to that? Mr. Dows. The public has understood that the interurban rail- roads are cheaper to buUd, and that it is a sort of imitation railroad, and cheaper to buUd than the old line. But I want to say that it costs more per mile to construct an interurban railroad than it does a steam railroad. Mr. Kennedy. As a rule the rails are heavier than those of the steam railroad ? Mr. Dows. I won't say heavier, but they are heavier than the branch lines of railroad, but not the main trunk hues, I would say. But they are built for high speed. The cars are expensive, and I do not know of any track that is not built after the approved steam fashion; that is, approved by engineers, and with anywhere from 2,640 to 3,000 tiesjper mile. Mr. Adamson. Those local lines generally originate in local neces- sity, do they not? Mr. Dows. Yes, sir. Mr. Richardson. Would you be willing to have a paragraph in here reading something along this line: "That the interurban rail- roads should be regulated and governed by all of the practices, rules, rates, and regulations that are applied under the law to steam railroads?" Mr. Dows. Well; we are now making reports to the Interstate Commerce Commission. Mr. Richardson. But do you think that would be advisable as applied to the whole country; to regulate them all? Mr. Dows. I think wherever they do an interstate commerce busi- ness they should. What difference does it make? Mr. Richardson. But they rarely' do an interstate-commerce business. Mr. Dows. They only tend to regulate the interstate carriage if they are a part in a chain of interstate commerce, so why not be regulated the same as the steam roads. Mr. Richardson. That would be making an exception of one where there are seventy or eighty that do not have interstate commerce. Mr. Dows. They would not have to be regulated. They are intra- state not interstate. There would be no necessity. Mr. Adamson. All you want is to strike out the exception, is that it? Mr. Dows. I am afraid that with these three lines in the bill it will mean to check the building of the railroads of the kind of which I am president. Here is a town with a grain elevator, stock yards, and everything of that kind, and a town that has no other railroad connection except ours Mr. Richardson. Why do you think if this paragraph is left in here that it will give the steam railroads great power to destroy and break upjthe interurban railroads ? tk, ja BILLS AFFECTING INTEESTATE COMMEECE. 1047 ^Mr. Dows. I know how hard they fought us; I know what they have done; I know they refused to put any rate in with us; I know that the passenger rate we had from Cedar Rapids to Iowa City was 65 cents and they went to work and put steam service on and hauled passengers for 25 cents. Mr. Adamson. They were not as clever as Mr. Cass's road. The Chaieman. But his road went back into the hands of a receiver. Mr. Cass. We lost our road by being good. Mr. Dows. They fought us; they would not put in any rates of any kind. Here were these towns, these communities of people that wanted to ship their stock, and they had to pay us the local rate either to Iowa City or Cedar Eapids and then the through rate from Cedar Rapids or Iowa City, instead of having a through rate from the point of shipment. Finally the Interstate Commerce Commission came in Mr. RiCHAEDSON. They withdrew the rate a;nd they refused division? Mr. Dows. They did not give us the rate. Mr. RiCHAEDSON. Would not agree with you at all; that is, they would not let their cars go over your tracks, and vice versa, or yours on their tracks. You appealed to the Interstate Commerce Commis- sion, and they established a through rate for you ? Mr. Dows. Yes; after a hearing that covered nearly a year, or more. Mr. RiCHAEDSON. After this steam system had refused to recognize you as a commercial line, refused to let their cars go over yourlines and yours over theirs, then the Interstate Commerce Commission acted in the matter and made them do it, and they saved you ? Mr. Dows. It not only saved us, but it gave these communities through which we went the benefit of the through rate. Mr. Petees. What do you do now that you have it? Mr. Dows. It takes a long while to get the tariffs in and get them started. We are doing quite a business and it is growing every month. I should say that last year — I didn't bring the figures with me — but I noticed before I left home that we handled eighty-odd cars of stock in January for one thing, and fifty-odd of them went to Chicago. That went over 27i miles of line. Mr. Petees. You stated that you had 70-pound rails. Have you determined the weight of the rails that you connect with ? Mr. Dows. Seventy-pound. Mr. Petees. So you have practically have an electrically equipped steam raijroad ? Mr. Dows. Yes; we can and have used steam over it right along. Mr. Petees. Isn't there a line of distinction between an electricjdly equipped steam railroad which does an interurban business, and a street railway which does simply a local business, a passenger busi- ness, and a business the principal feature of which is on the highway, which does not have fares, which does not sell tickets, but simply picks up passengers along the line, the same as the old horse railroads ? Mr. Dows. Yes; there is a difference, and the commission does not have to put in these rates, if I understand the law, I might say to the chairman. It says that they have a right to put in a rate where satisfactory, and where a through rate does not now exist. Now, my understanding would be, the physical ability to handle the business. Of course if a road is not physically able 1048 BILLS AFFECTING INTERSTATE COMMERCE. Mr. Richardson. The* commission can also, under this bill, initiate any rate it pleases upon any line of railroad ? Mr. Dows. Yes; I think so. The Chairman. You say that formerly you could not get joint rates with the steam railroads? Mr. Dows. No, sir. The Chairman. And that after the passage of the Hepburn law you filed a petition with the Interstate Commerce Commission, and received authority to have a joint rate? Mr. Dows. Yes, sir. The Chairman. I suppose you would consider that that legislation would naturally be desired by the people of Iowa, so that you could get these joint rates. Do the people of Iowa think that you ought to have the power to get a joint rate? Mr. Dows. I think they do. I know that everybody on our line does, and some of the farmers joined in the petition. Thp Chairman. And in order to prove their desire to have a joint rate, they retired Mr. Hepburn from Congress — the one who made it possible for them to get tne joint rate. Mr. Dows. Well, that was down in the Eighth District, and I live in the Fifth District. That is down on what we call the "Reserva- tion." Those fellows are from Missouri. The Chairman. Is there any difference of opinion out there on the subject? Mr. Dows. On the subject of what? The Chairman. As to whether Mr. Hepburn ought to have been retired ? Mr. Dows. I thihk he ought not to have been. I think that Pete Hepburn ought to be in Congress 'to-day, and I say that with all due reject to Mr. Jamieson, whom I know very well. Mr. Adamson. Aren't your people waking up to the fact that it is better to elect any Democrat than even the best Republican? Mr. Richardson. And aren't your people dissatisfied and dis- contented about this tariff? The Chairman. It was because the Hepburn biU was put through that the people at that time retired Mr. Hepburn — to show their dis- satisfaction with him. Mr. Dows. Ydu must remember that they had Colonel Hepburn's scalp once or twice before. He represented a district where they got his scalp before. The Chairman. But Mr. Hepburn was fourteen years chairman "of this committee and passed the Hepburn bUl. He put through the law which you say was of great benefit to the State of Iowa, but which the people of his district say was not a benefit. Mr. Dows. I don't think that the people of Iowa are against that law. Mr. Washburn. Is it in order to move that we strike all of this political discussion from the record? The Chairman. No; because it is past, and is now in the record. Mr. Richardson. I think the reporter should be instructed to leave all this out, because it is only mere pleasantry. r^jj Mr. Kennedy. I would like to call your attention to the operation of an electric road. Do you know anything about the comparative economy of operating by electricity and steam? BILLS AFFECTING INTERSTATE COMMERCE. 1049 Mr. Dows. I never have operated by steam. Mr. Kennedy. You know something about it? Mr. Dows. I should say that the operating by electricity, upon a short liae, is very much more economical. Mr. Richardson. 'Do you carry United States mail? Mr. Dows. Yes, sir. Mr. Kennedy. You have heard a good deal of talk about the steam railroads abandoning steam and equipping their lines with electricity, have you not? Mr. Dows. I believe there is a good deal of talk about that. Mr. Kennedy. The character of motive power is not a proper classification, is it, of carriers? Do you know that the gas engme, in business, is putting the steam engine out of business? Mr. Dows. It is doing a great deal of stationary work that the steam engine used to do. Mr. Kennedy. And the gas engine, in only a few years that it has demonstrated its utility, wiU probably supplant the steam loco- motive? Mr. Dows. I don't know anything about that. I know that gasoline cars are being operated by a number of railroads over their branch hnes. Mr. Kennedy. Then the gas, being exploded in the cyhnder by an electric spark, would make it more of an electric railroad than a steam road, would it not ? Mr. Dows. Yes; I suppose it would. Mr. Kennedy. Do you laiow of any steam railroad that is not a passenger railway ? Mr. Dows. No, sir; I do not. Mr. Kennedy. And would come as much within this language as your road ? Mr. Dows. I should think so. I don't know of any steam railroad that does not haul passengers and do a passenger business, and that is not a passenger railway. STATEMENT OF ME. W. J. FERRIS, OF lA CROSSE, WIS. Isiv, Ferris, ^h. Chairman and gentlemen, I am in somewhat of a different position as compared with Mr. Cass and Mr. Dows, who have just finished, inasmuch as we are not operating at the present time. We have recently secured a franchise m the city of La Crosse and one in the city of Onalaska, and the city council of GalesviUe and also the city council of Winona, Minn., have under consideration franchises for the building of this interurban line. We have spent a good deal of money in the surveys and the preliminary work of or- ganization and in complying with the laws of the States of Minnesota and Wisconsin. I am in hearty sympathy with the expressions of Mr. Cass and Mr. Dows regarding the lines on page 18 of this bUl. In the building of these proposed lines we will tap a country that has no railroad facilities at the present time, no means of getting their goods to market excepting through and over the highways, which are quite hilly in that section, and we believe when we come into the city of La Crosse with this railroad the carload lots of freight from that upper section should have a through rate established for the markets of 1050 BILLS AFFECTING INTEBSTATE COMMERCE. Chicago and elsewhere. And it seems to me, and is my judgment as well as that of both Mr. Cass and Mr. Dows, that this clause referred to here is going to be a detriment to the working of our proposition. There is little that I can say beyond that point, gentlemen, except- that if that clause is what I think it is it will probably stop the build- ing of this proposed line, even though we have gone quite a ways with it and spent a good deal of money, because we are relying upon the interchange of freight with the passenger roads. Mr. Stafford. Under the franchise that has been granted are you privileged to operate your railway with any kind of power ? Mr. Ferris. Not within the city limits of La Crosse. Mr. Stafford. Outside of the city limits you are privileged to operate regardless of the character of power? Mr. Ferris. Yes, six. Mr. Stafford. So your road would be virtually a railroad operated by electricity? Mr. Ferris. By electricity, yes. Mr. Stafford. What is the length of the proposed line? Mr. Ferris. About 36 miles. Mr. Peters. Isn't there a distinction between such a road and a strictly street railway? Mr. Ferris. Yes, sir. Mr. Peters. Wouldn't you say that there is more of a line of dis- tinction between their general business than the character of the interurban and the steam railroad? Would you not say that the interurban railroad was more similar in general character and the province it had to meet in the way of traffic and rates, and so forth, to a steam railroad than a street railway, one entirely operated in the streets, and which did simply a local business, the carrying of pas- sengers for one fixed fare, 5 cents or multiples of 5 cents, and did not sell regular railroad tickets? You say that there is more of a line of distinction between those two — that is, a street railway and an inter- urban railway — than between the interurban and the steam? Mr. Ferris. I think so. The Chairman. Do you expect to issue your stock at par value and receive cash for it ? Mr. Ferris. That is a question. The Chairman. You have not referred to this biU as afifeeting that proposition; but if this bill becomes a law as it stands it would require you to sell your capital stock at par for cash. Mr. Ferris. If the bill becomes a law, I presume we will have to take our chances with it in every respect. The Chairman. Why, there is no question about that; you would be like anybody else. Everybody will take their chance if the bill becomes a law. But what I wanted to get at is what effect it will have. In other words, we have not had presented to us this point of view: There is considerable rivalry between steam and electric roads in some portions of the country. The electric railroads are the ones that are mainly the new roads that are being built. What effect will this have upon the building of new electric roads and the attitude of steam roads toward the proposition which might prohibit the con- struction of new electric roads? Mr. Ferris. I don't know as to that. BIIjLS ArPECTING INTERSTATE COMMEKOE. 1051 Mr. Kennedy. The electric road is now principally built by moneys received from bond sales, is it not? Mr. Feeeis. In some instances; yes, sir. Mr. Kennedy. Practically all the finance for building a road is realized from the sale of bonds ? Mr. Ferris. In the State of Wisconsin that does not apply wholly, for the reason that 20 per cent of the capital stock must be paid in. Mr. Kennedy. Of the capital stock? Mr. Ferris. Yes, sir. Mr. Knowland. You think that you would rather take your chances on being compelled to sell your capital stock at par than to have this paragraph remain in the biU? Mr. Ferris. I think if that paragraph remains in the bill and the treatment is accorded our company that has been explained here before the committee as having been given to the other roads that have been represented here that we would rather not build the road. The Ghairman. I might suggest to you that the provisions that you are objecting to have no relation to the proposition about the issuance of stock. The exception is not made in the section that requires that aU companies shall issue their stock for par. Even if this provision that you object to should remain in the bill, you would still be required to sell your stock for par. Mr. Kennedy. Would it affect the sale of the bonds ? You have had some experience in financing these roads, have you not ? Mr. Ferris. No; not in the financing of interurban roads. Mr. Kennedy. But you know about it. Would it make it more difficult to sell the bonds if you issued a great lot of stock as prac- tically a bonus to go with the bonds? Mr. Ferris. Yes, sir; it would make it more difficult, Mr. Kennedy. You might have to sell the bonds a little cheaper? Mr. Ferris. Probably so. Mr. Kennedy. The roads of the character that you speak of, through my section, have been built entirely by the sale of bonds. The stock represents franchises and one thing and another obtained in cities, but the money has been entirely received from the sale of bonds. Mr. Ferris. That is largely true. Mr. Kennedy. Do you think it would make it impossible to build this class of railroads if we should pass this bill requiring the stock to be sold at par? Mr. Ferris. It might possibly have a very serious effect on the building of the roads; yes, sir. Mr. Kennedy. But a few hundred shares of stock could be sold at par, and if you bad the franchises and the charter from the State, why would not the bonds sell as well with only a few hundred shares of stock outstanding as though there were milUons ? Mr. Ferris. I should think they would. It simply is a question of dollars iavested in the road, whether in stock or bonds. Mr. Stafford. What you desire is to have, for your road, the inter- changeable feature with the other railroads in through routings ? Mr. Ferris. Yes, sir. The Chairman. I will insert at this poiat a letter relating to express company franks, from Mr. T. B. Harrison, jr., who appeared before this committee. 1052 BIIiLS AFFECTING INTERSTATE COMMERCE. (Following is the letter referred to:) New York, February 14, 1910. Hon. James R. Mann, ■ Chairman Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. Dear Sir: When I made some BUggestions before your committee on January 28 as to a change in the present law authorizing express companies to issue and exchai^e franks, and also authorizing railroad companies subject to the act to regulate com- merce to issue complimentary free transportation to the officials of foreign raifroad companies and their families while traveliag in this country, the committee very kindly gave me permission to hand in a memorandum showing the changes I siig- gested. I did not have an opportunity to prepare such a memorandum before leaving Wash- ington that afternoon, and I have been away almost continuously since, and have not, therefore, had such opportunity until to-day. I have taken the liberty of preparing an amendment to section 1 of the act which, I thiuk, will put in effect the suggestions I made to the committee, if the committee consents to them, and I herewith inclose a copy of such amendment, on which the proposed changes are shown in italics. I may say that the proviso authorizing common carriers to interchange free or reduced transportation of or for their officers, agents, surgeons, attorneys at law, and their families, is practically the exact language of the present New York law, and I have tried to guard this by providing that the transportation authorized to be exchanged shall be for the exclusive use or consumption of the person or persons to whom issued. I may add that in almost all of the States which have adopted antipass laws within the last few years the laws have been broad enough to authorize express companies to issue and exchange franks, and that in several of those States in which the laws were not broad enough for this authority amendments have been passed giving such authority, notably in Alabama and Michigan. I assume, of course, that the committee will recommend the passage of some general bill amending the Hepburn Act; and it so, and the committee agrees with the sugges- tions I have made on behalf of the express companies and the American Railway Association, I would respectfully suggest that the attached amendment, or some similar one, be put in as a section of the bill recommended by the committee. Yours, very truly, T. B. Harrison, Jr. That section one of the act to regulate commerce, approved February fourth, eighteen hundred and eighty-seven, as amended, is hereby amended to read as follows: Section 1. That the provisions of this act shall apply to any corporation or any person or persons engaged in the transportation of oil or other commodity, except water and except natural or artificial gas, by means of pipe lines, or partly by pipe lines and partly by railroad, or partly by pipe lines and partly by water, who shall be considered and held to be common carriers within the meaning and purpose of this act, and to any common carrier or carriers engaged in the transportation of pas- sengers or property wholly by railroad (or partly by railroad and partly by water when both are used under a common control, management, or arrangement for a continuous carriage or shipment) from one State or Territory of the United States or the District of Columbia to any other State or Territory of the United States or the District of Columbia, or from one place in a Territory to another place in the same Territory, or from any place in the United States to an adjacent foreign country, or from any place in the United States through a foreign country to any other place in the United States, and also to the transportation in like manner of property shipped from any place in the United States to a foreign country and carried from such place to a port of transshipment, or shipped from a foreign country to any place in the United States and carried to such place from a port of entry either in the United States or an adja- cent foreign country: Provided, however, That the provisions of this act shall not apply to the transportation of passengers or property, or to the receiving, delivering, storage, or handling of property wholly within one State and not shipped to or from a foreign country from or to any State or Territory as aforesaid. The term "common carrier" as used in this act shall include express companies and sleeping-car companies. The term "railroad" as used in this act shall include all bridges and ferries used or operated in connection with any raifroad, and also all the road in use by any corporation operating a raifroad, whether owned or operated under a contract, agreement, or lease, and shall also include all switches, spurs, tracks, BILLS AFFECTING INTEESTATB COMMEBCB. 1053 and terminal facilities of every kind, used or necessary in the transportation of the persons or property designated herein, and also all freight depots, yards, and grounds used or necessary in the transportation or delivery of any of said property; and the term "transportation" shall include cars and other vehicles and all instrumentalities and facilities of shipment or carriage, irrespective of ownership or of any contract, express or implied, for the use thereof, and all services in connection with the receipt, delivery, elevation, and transfer in transit, ventilation, refrigeration or icing, storage, and handling of property transported ; and it shall be the duty of every carrier subject to the provisions of this act to provide and furnish such transportation upon reason- able request therefor, and to establish through routes and just and reasonable rates applicable thereto. All charges made for any service rendered or to be rendered in the transportation of passengers or property as aforesaid or in connection therewith shall be just and reasonable; and every unjust and unreasonable charge for such service or any part thereof is prohibited and declared to be unlawful. No common carrier subject to the provisions of this act shall, after January first, nineteen hundred ancf seven, directly or indirectly issue or give any interstate free ticket, free pass, orfree transportation for passengers or property, except to its employees and their families, its officers, agents, surgeons, physicians, and attorneys at law, and their families; to ministers of religion, traveling secretaries of Railroad Young Men's Christian Associations, inmates of hospitals and diaritable and eleemosynary institu- tions, and persons exclusively engaged in charitable and eleemosynary work; to indi- gent, destitute, and homeless persons, and to such persons when transported by char- itable societies or hospitals, and the necessary agents employed in such transportation; to inmates of the national homes or state homes for disabled volunteer soldiers, and of soldiers' and sailors' homes, including those about to enter and those returning home after discharge, and boards of managers of such homes; to necessary' care takers of live stock, poultry, and fruit; to employees on sleeping cars, express cars, and to linemen of telegraph and telephone companies; to Railway Mail Service employees, post-office inspectors, customs inspectors, and immigration inspectors; to newsboys on trains, bag^ge agents, witnesses attending any legal investigation in which the common car- rier is interested, persons injured in wrecks, and physicians and nurses attending such persons: Provided, That this provision shall npt be construed to prohibit the interchange of free or reduced transportation between common carriers of or for their officers, agents, em- ployees, attorneys, and surgeons, and their families: And provided further, That the trans- portation of persons and property authorized to be exchanged hereunder shall be for the exclusive use and consumption of the person or persons to whom it is issued; nor to pro- hibit railroad companies subject to the act from issuing free transportation to officials of foreign railroad companies and their families, when traveling in the United States; nor to prohibit any common carrier from carrying passengers or property free with the object of providing relief in cases of general epidemic, pestilence, or other calamitous visita- tion: Provided further! That the term "employees," as used in this paragraph, shall include furloughed, pensioned, and superannuated employees, persons who have become disabled or infirm in the service of any such common carrier, and the remains of a person killed in the employment of a carrier, and exemployees traveling for the purpose of entering the service of any such common carrier; and the term "families, " as used in this paragraph, shall include the families of persons killed while in the serv- ice of any such common carrier. Any common carrier violating this provision shall be deemed guilty of a misdemeanor, and for each offense, on conviction, shall pay to the United States a. penalty of not less than one hundred dollars nor more than two thousand dollars; and any person, other than the persona excepted in this provision, who uses any such interstate free ticket, free pass, or free transportation shall be subject to a like penalty. Jvuisdiction of offenses tmder this provision shall be the same as that provided for offenses in an act entitled "An act to further regulate com- merce with foreign nations and among the States," approved February nineteenth, nineteen hundred and three, and any amendment thereof. From and after May first, nineteen hundred and eight, it shall be unlawful for any railroad company to transport from any State, Territory, or the District of Columbia, to any other State, Territory, or the District of Columbia,' or to any foreign country, any article or commodity, other than timber and the manufactured products thereof, manufactured, mined, or produced by it, or under its authority, or which it may own in whole or in part, or in which it may have any interest, direct or indirect, except such articles or commodities as may be necessary and intended for its use in the conduct of its business as a common carrier. Any common carrier subject to the provisions of this act, upon application of any laterjd, branch line of railroad, or of any shipper tendering interstate traffic for trans- portation, shall construct, maintain, and operate, upon reasonable terms, a switch 1054 BIULS AFFECTING INTERSTATE COMMERCE. connection, with any such lateral, branch line of railroad, or private side track, which may be constructed to connect with its railroad, where such connection is reasonably practicable and can be put in with safety and will furnish suflScient busi- ness to justify the construction and maintenance of the same; and shall furnish cars for the movement of such traffic to the best of its ability without discrimination in favor of or against any such shipper. If any common carrier shall fail to install and operate any such switch or connection as aforesaid, on application therefor in writi^ by any shipper, such shipper may make complaint to the commission, as provided in section thirteen of this act, and the commission shall hear and investigate the same and shall determine as to the safety and practicabilitjr thereof, and the justification > and reasonable compensation therefor, and the commission may make an order, as provided in section fifteen of this act, directing the common carrier to comply with ^e provisions of this section in accordance with such order, and such order shall be enforced as hereinafter provided for the enforcement of all other orders of the com- mission, other than orders for the payment of money. (At 11.55 a. m. a recess was taken until 2 p. m.)' AFTER RECESS. The committee met at 2 o'clock p. m., Hon. Irving P. Wanger in the chair. STATEMENT OF E. M. TEKRY, REPKESENTIITG THE NATIOXAl LUMBER EXPORTERS' ASSOCIATION. Mr. Terry. Mr. Chairman, may I make a brief statement ? Mr. Wanger. Certainly. Mr. Terry. I represent some lumber exporters. Mr. Wanger. What is yoiu- name? Mr. Terry. My name is E. M. Terry. Mr. Wanger. Whom do you represent ? Mr. Terry. The National Lumber Exporters' Association. I have particular reference to bill No. 16312, Mr. Mann's bUl. In section 2, on pages 8 and 9, it provides that the local rate shall not be higher than the rate to the port on a through export shipment. ____• , j. j Mr. Wanger. What section is that? - '^. -r ,■ - ,JJ3^?^i]r^j^ Mr. Terry. Section 2: , -^f| ^>^ ^^ ^3jn73! ^-JE"^ -^ %,2 s.,..^ ':a If any common carrier, etc., shall charge or receive a greater compensation on a shipment to a port of entry than a through shipment to the same port, to a foreign destination, etc. .4 .4 d *4iS^ That is in reference to receiving a higher local rate, as I understand it, than a rate on an export shipment through the same port. I really do not know the reason for the provision, but we merely wish to suggest that if it remains in it would be fair to the exporters to provide also that no export to the port shall be higher than the local rate. In other words, it should be equalized both ways. The pro- vision as it stands is for the benefit of the local domestic shipper; but as I say, if the provision is retained we think it would be the proper thing to provide also that the export rate to the port should not be higher than the local rate. ►'<*^ Mr. Adamson. Are there ever any cases where the export rate is more than the local rate ? Mr. Terry. Oh, yes; there are a number of cases. We have already presented a case to the Interstate Commerce Commission where a number of export rates are higher than the local rates to the port. As a matter of fact, I do not see where the question comes in BIULiS AFPBGTING INTEBSTATE COMMEECE. 1055 as regards the difference in rates, in the first instance, because the rates are not competing. The export shipment does not compete with the domestic shipment. Mr. Adamson. I would rather have your proposition than this one, if we are going to have either. Mr. Tbrky. My proposition? Mr. Adamson. Yes; I say I would rather put in your proposition than the one that is in the bill. Mr. Tekry. Well, in our view there is no reason why there should be any difference in rates. That is, there is no reason why there should be a higher local rate than an export rate to the same port, and, as I say, we have already presented a case to the Interstate Commerce Commission on that very question. Mr. Wangee. Does not the section as it reads relate to both exports and imports ? Mr. Teeey. Yes; but that does not to^ch the export feature as regards a higher export rate than a local rate. It only refers to where the local rate happens to be higher than the export rate. Mr. Adamson. As I understand the gentleman, he is trying to pre- vent any rates from being cheaper than local rates. Mr. Teeey. You see, there are two classes of traffic to the same port, we will say, for instance, to New York. The domestic shipment is delivered locally to a yard in New York City. That is one class of traffic. Another class would be where the shipment goes through to New York and is not stopped there, but goes on to a foreign destina- tion. There are two rates, we will say, to the port of New York. One is the domestic and the other is the export rate. As I understand it, this bill seeks to provide that the domestic rates to New York shall not be higher than the export rates. I really do not know the reason for it, but, as I said before, if it provides for that, it should also provide, in fairness to the exporter, that where an export rate to that port should happen to be higher than the domes- tic rate, the same rate shall be charged; that is, that the export rate should not be allowed to be higher than the domestic rate. That is the other side of the proposition. It is only one sided, so far as we can see, as it stands now. It is in favor of the domestic shipper. Mr. Staffoed. In the case you instance, is there a separate rate when the goods are to be exported from New York, known as the export rate, or is it a through rate to the point of dispatch in a for- eign country? Mr. Teeey. Well, there are really no through rates filed. Only the inland proportion of the through rate has to be filed. Mr. Staffoed. So at present there is in the tariffs a local rate from an interior point to New York, for instance, and if that character of shipment goes abroad there is a different rate for export business to New York? Mr. Teeey. There may be a different rate. Now, in the case of shipments via the port of New Orleans, there are several different rates. I mean, there are several different cases where the export rates are higher than the local rates. Mr. Wangee. You want the rates to be identical, whether the article is for export or domestic ? Mr. Teeey. We do not want the local rate to be higher than the export rate. 1056 BILLS APPECTING INTEESTATE COMMERCE. Mr. Adamson. It looks like this goes both ways and provides for all that. I am afraid it provides too much. The only thing that saves the commerce of this country from absolute destruction through the iniquities of the protective tanflf is that the railroads have brought in goods at a lower rate to the interior of the country. Mr. Terry. Of course I am not speaking of the import traffic now. Mr. Adamson. This applies both ways. Mr. Terry. Yes; but it does not cover the export-rate feature, as I have tried to explain. Mr. Adamson. I think it does. Mr. Terry. It says that common carriers shall not charge or receive a greater compensation for the transportation of property, etc., between any point in the United States and any port of entry in the United States. Mr. Adamson. Yes; than it would on a shipment through beyond the limits of the United States. Mr. Terry. Yes. Mr. Adamson. Well, that is an export or an import rate. Mr. Terry. Yes; but that refers to the higher local rate, and it does not refer to a case where the export rate to the port happens to be higher than the local rate. Mr. Adamson. I disagree with you, and I will vote against that whole section. Mr. Terry. As a matter of fact, we do not understand just the reason for the insertion of the provision, because, as I said in the first instance, the two classes of traffic are not competitive. Mr. Stafford. I suppose the basis of your contention is that for the protection of our export trade the export rate should be at least no higher than the local rate? Mr. Terry. That is the idea, exactly. We have no objection to the provision as it stands as regards the local rate, but if it is retained there we see no reason why an amendment should not be inserted covering what this gentleman has just pointed out — that no export rate shall be higher than the local rate. Mr. Adamson. I am with you. The imports and the exports go hand in hand and are generally averaged up in all periods. When you increase one, you increase the other. When you decrease one, you decrease the other. Mr. Wanger. Have you stated all you wish to say? Mr. Terry. That is all, sir. Mr. Faulkner. Mr. Chairman, we are ready to go on now in regard to the minimum speed of 16 miles per hour. I only want to put on two or three gentlemen who are familiar with what we may call the "cattle roads" — the Atchison, Topeka and Santa Fe, the Burlington, the Chicago, Milwaukee and St. Paul, and the Union Pacific. Mr. Wanger. All right. Senator. Will you call the first witness? STATEMENT OF D. I. BUSH, GENERAI MANAGER CHICAGO, MILWAUKEE AND ST. PAUL RAILWAY COMPANY. 'Mr. Bush. Mr. Chairman and gentlemen, with reference to the pro- posed bill requiring a minimum speed of 16 miles per hour in the transportation of live-stock shipments, I wish to say for the Chicago, Milwaukee and St. Paul Railway Company, and I assume others are BIIAS AFrECTING ISTTEBSTATE OOMMBKCE. 1057 in the same situation, it would be practically a physical impossibility to comply with such a requirement without a very large reduction in the tram load. In the operation of our trains a reduction of not less than 20 per cent is made for the train load of an engine handling a live-stock train as compared with the train load of the same class of engine hauling dead freight, and even at that we are not able to make what we con- sider fairly good time with live-stock trains. Mr. Richardson. Why does that reduction of 20 per cent occur? Mr. Bush. Why is it necessary? Mr. Richardson. Yes. Mr. Bush. For the expedited movement. Perhaps this will ex- plain that much better: Taking any engine in service on our railroad, and we took as a basis what is known as our Class G 7 engine, which is practically our standard freight engine, a 10-wheel engine, it has a tractive power of 32,600 pounds at a speed of 10 miles per hour. Increasing the speed to 16 mUes per hour gives that same engine a tractive force of 27,710 pounds, or a reduction in the train load of 15 per cent. Mr. Stafford. Is your unit pounds? Mr. Bush. Yes, sir; the tractive power is pounds. At a speed of 30 miles per hour the tractive force is reduced to 16,940 pounds, or a reduction in train load of 49 per cent. In handling live stock on the Chicago, Milwaukee and St. Paul Railroad we have two classes, one known as range stock, which comes to the Chicago, Milwaukee and St. Paul road at a point on the Missouri River known as Mobridge. That stock comes to us in train lots of 18 to 20 cars arid up to 25. We establish a schedule of forty hours to Chicago, a distance of 810 mUes, which is twenty and a quarter miles per hour. In the month of October, in handling 8,900 cars, the average time was forty-six hours, but on a schedule of forty hours, taking 10, trains just as they came, one after the other, they met with a resist- ance in their movement, due to passenger trains and opposing freight trains, of eight hours, reducing the actual running time to three and a half hours, making a speed of twenty-five and a half miles per hour, approximately. In the last part of the run, a distance of 9 miles from Western avenue to Union Stock Yards, we must have not less than two hours for the 9 mUes. Through the other gateway we must have three hours for the 22 mUes. In handling the local business, it is assembled from different sta- tions and from the branch lines and junction points. As an illus- tration, we would receive 5 cars of stock that came from a branch line, delivered at the junction with the main line to a through train. They would have but 5 loaded cars. We would have to go back to the point where the 5 cars were reached in picking up by the branch line, and figure on a minimum speed of 16 miles per hour from there to the yards. With 5 cars of stock we could make the time. We could make better than 16 mUes per hour. I think perhaps with 5 cars we could average 25 mUes per hour; but we would have to run so many stock trains with this very light tonnage that it would barely pay the wages and fuel consumed by the engine; that is, the 23738— FT 18—10 ^3 1058 BILLS AFFECTING INTERSTATE COMMEKCE. wages of the entire crew and the fuel and other supplies to run these Ions; distances of 400 or 500 miles with 5 cars of stock. Consequently, to reduce the cost of operation, that engine moves from the point where she first got the 5 cars and picks up until she gets a reasonable train load. If she is delayed in doing that, we make a further reduction in tonnage. In many instances we run 150 or 200 miles with 40 per cent of the train load, in order that the stock may reach the market in time. If it is there later than 8 o'clock, it is not considered available for sale on the day of arrival. This local stock is offered to a concentrating point known as "Savanna," 128 miles out, a point where we dehver it or move our trains over another belt line. There are instances where there are 16, 18, or 20 of those trains following each other on a Monday morn- ing. A slight failure that could not be anticipated in the engine of the leadirig train or in the engine of any of the following trains would set them all back to a point where those following would not be able to get to the market and meet the requirements of the law. We have had no complaint from the shippers except in individual cases. There are instances where we would get, say, 20 cars of stock at a point on our Council Bluffs division, and there would be, perhaps, 3 other cars on the next freight district, 124 miles. We would undertake to have some local train gather up those 3 cars and take them to the division terminal, where they could be set into this 20-car train and then continue the run uninterruptedly, except trains that could not be expected to make reasonable time. Now, on those we do receive complaint. Three shippers from dif- ferent points would complain that their stock had to oe loaded too early and were a long time on the road. That is literally true; but if the train having the 20 cars had been required to stop at these three different places, switch out the cars, and get them into the train, the whole 23 would have arrived late for the market, and probably would have been carried over until the following day. We feel that any fixed minimum would hardly be fair to the ship- pers, as a whole, and not fair to the service ; but it must be apparent to the stock shipper and to others that a well-managed railroad is only successfully managed to the extent that they are able to keep their cars and engines in mption. The greater extent to which that can be accomplished, the greater the reduction in the cost of conducting transportation, and the greater the earning capacity of your property. These delays that occur have been claimed to be due to overloaded trains. I do not beheve there is a western railroad that overloads a stock train except in cases of emergency. "W^e have instances, which I will use as an illustration, where 20 stock trains arrive at Savanna, following each other, perhaps, on a schedule of five hours for 128 miles. Some engine in that group may fail. There is qo other engine avail- able that could be gotten to the disabled one or to take her place, and that stock may be divided up between the first three following trains. I can recall one instance of nandling 46 cars of stock for the last 32 miles, which is the greatest number, with one exception, in a period of seven years of which I have personal knowledge. The average is 25. Thirty-five is the exception. We are as much interested in the prompt handling of live stock as the owner, but the conditions at all terminals, where the stock must be finally dehvered, all arriving there on two days in the week, or BIIJJS AFFECTING INTEESTATB COMMEECE. 1059 practically all, make it a physical impossibility to expedite the service during the last 10 or 15 miles of the run. We have brought stock trains into Chicago and stood in line with the several other railroads as long as seven hours before our trains could be delivered at the stock chute. Of course in those instances the stock shipper complains very bitterly, and he has a reasonable right to complain; but when the conditions are known it is a matter over which nobody has any con- trol except the stock shipper himself. They all go to the markets on Mondays and Wednesdays, and it is largely the western stock. The three largest stock-carrying railroads in the Chicago territory are the Chicago and Northwestern, the Burlington, and the St. Paul. There are instances when those three railroads on Mondays take in there as high as 2,000 cars. Mr. Wanger. How rapid is the movement of stock trains com- pared with other freight trains ? Mr. Btjsh. Taking the actual records on our railroad, barring the serious weather conditions of the past two months, the average speed of freight trains on the Chicago, Milwaukee and St. Paul, as a whole^ it depends somewhat on the division — was not under 10 mUes per hour, and up as high as 13. The stock- train movement is figured on the basis of approximately 18 mUes per hour. On the movement from the Missouri River to the yards, taking the entire movement for the month of October, the average speed of our trains was 19 and a fraction miles per hour. Mr. Knowland. How fast do your fruit trains move ? Mr. Bush. Well, slightly less than that. Mr. Knowland. Less than the cattle trains ? Mr. Bush. Yes. The fruit trains are made up a little different. The fruit comes to us in a rather different form and shape. We get five to ten cars of fruit, and we will aim to put in that train enough dead freight to get to about 65 per cent of the carrying capacity or tonnage rating of the engine. But there is one thing in connection with the fruit trains, as a rule, that I want to call attention to. They move over a portion of the territory where the traffic is the most dense in the daytime. The stock movement passes over the -dense traffic divisions during the night. I think you all know that the movement of any train is expedited with less energy during a day- light movement than after dark. The engine does a great deal more slipping. Enginemen as a rule have not the same confidence in a night movement, particularly in the handling of a freight train, as they have in the daytime, when they can see everything. Ihat is perfectly natural. We all walk about ourselves with greater care m the nighttime than we do in the daytime. I have served in every capacity in the railway service, and I know that that is true so far as enginemen are concerned. Ihere is something that causes the feeling that when it becomes dark and you are depending upon fixed signals, with the same train load and the same class of car you will not do quite as well. Mr. Richardson. It is not always attributable to engines. It is attributable to the employee of the railroad running the engine, is it not? Mr. Bush. To the man; yes. Mr. Richardson. It is not the fault of the engine, is it? 1060 BILiS AFFECTING INTERSTATE COMMEBGE. Mr. Bush. An engine does more or less slipping on the rails; and our superintendent of motive power, who is here as a visitor awaiting his turn before another committee, I think will bear me out in the statement that the efficiency of an engine in that movement, as a rule, is somewhat reduced. Is that so, Mr. Manchester? Mr. Manchester. I would say so. Mr. Richardson. How can you account for that? Mr. Bush. You do not get the same adhesion with the rail from the moisture in the atmosphere. You use more sand to give your engine the tractive force applied. During the daytime, except in rainy weather or , foggy weather, there is but very little sand used under the driving wheels of an engine to keep her on the rail so as to exert her power properly.. Mr. Stafford. In the average speed for your freight trains of 10 to 13 miles per hour, do you refer to the through freight trains? Mr. Bush. I take the trains as a whole. I take the average speed of the trains as a whole. Mr. Stafford. What is the average speed of your through freight trains from Chicago to the Northwest? Mr. Bush. Approximately 10 miles per hour, the dead freight trains. Mr. Stafford. Taking into consideration the average speed for stock trains, when formed exclusively as stock trains, and computing it from the time that the stock is received on branch lines, what would be the average rate for the entire distance, if you have that calcula- tion? Mr. Bush. The basis upon which those movements are made is on 18 miles per hour, but it is not maintained. Mr. Stafford. On the branch lines you do not maintain the same dispatch as after the train is once made up in a solid cattle train? Mr. Bush. Oh, no, sir. Mr; Stafford. Erom Savanna to Chicago, all your cattle trains are solid trains? Mr. Bush. Yes, sir. .Mr, Stafford. What speed is maintained in that distance? Mr. Bush. The average for the entire month of October was 17.4 miles per hour. Mr. Stafford. The average speed, as I understand you, before the cars are assembled at Savanna or any other point where you assemble the cars, is much less? Mr. Bush. Very much less; yes, sir. Mr. Stafford. Can you give the committee any estimate as to what that average is ? Mr. Bush. Well, perhaps I could give you an illustration. We have several branch lines leading to our main line, which extends from Chicago to Omaha. There are a number of branch lines leading to it across the State of Iowa. The schedule time of the freight trains on the branch lines is usually on the basis of 10 to 12 miles per hour. During the days of the week on which the stock run is heavy the speed will not average on that branch line more than 7 miles per hour. That is for this reason: A train will start, say, 56 miles from the main line — we have a case of that kind — and will probably pick up from 5 to 10 cars of stock. The train men assist in loading it. Wnilethe car may be right at the loading chute, the shipper is very anxious to BILLS APFECTING INTERSTATE OOMMEBOE. 1061 put his stock into the car at the very last moment, to get the best or the greatest time from the time shown on the waybill that the stock is loaded to reach the yards without unloading under the 28-hour law, or, if that is extended by written consent, 36 hours. They will wait until the train arrives at the station. The train crew will take the engine around to the stock car. Sometimes there may be two or three to load at that station, and only one can be spotted at the chute at a time. We furnish facilities for moving the cars by hand, but they are rather loath to do that. They do not want to get the stock into the cars and have it remain there fifteen, twenty, or thirty minutes and then be obliged to unload for feed, water, and rest in transit. The speed of the train on branch lines, when moving between stations, is 20 to 25 miles per hour, but from the time they load at the first station until they reach the point where it is delivered to the main line, the total time, and reducing it to the thought that the train is in motion all the time, will only give you 8 miles per hour, while between stations they may be running 25 or 30. Mr. Richardson. If you operate upon the minimum of 16 miles per hour would you be able to make up the time on the branch roads after you strike the main line ? Mr. Bush. We do. Mr. Richardson. Do you make up the difference in the time you have lost ? Mr. Bush. Not always. Tliat is the difficulty with the proposition. We are compelled under this measure to maintain a rate of speed that will give us a minimum of 16 miles per hour from the point where we have gotten into the train five cars of stock and until it reaches its destination. Mr. Stafford. Taking the solid train; where you average 18 miles an hour, what is the maximum speed that the train has to go in order to maintain it through the entire run, taking into account the delays that are encountered by going through terminals and cities and the like? Mr. Bush. Where the grades are in favor of the movement, a speed of 50 and 55 miles an hour is often made. We have stock trains that move from Savanna to Franklin Park, 128 miles, where we have reduced the tonnage to 20 cars, that have made that run in three hours and five minutes. Mr. Stafford. Is there any competition between the stock-carrying roads running into Chicago for the traffic by reason of speed and other facilities offered to the patrons, to the stock shippers ? Mr. Bush. I do not know that I am quite clear on that question. Do you ask if they attempt to make greater speed in order to secure the business ? Mr. Stafford. Yes. Mr. Bush. There is this about it. The railroads have gotten together a great many times with a view of undertaking to have this stock distributed over more than two days of the week. In that we absolutely failed. Other meetings have been held where it was sug- gested that we make a uniform schedule of speed. After such an agreement has been reached, and that has never been less than 16 miles per hour, after the stock has been assembled in train-load lots, then there has been a very honest and earnest effort on the part of all 1062 BIIiLS AFFECTING INTERSTATE COMMERCE. the railways in the same territory to maintain the schedule, even at considerable loss in train loads. Mr. Stafford. Has your company received any complaints from the stock shippers, complaining about the speed of the trains ? Mr. Bush. No, sir. We have the individual complaints, as I men- tioned to you here a few minutes ago, where the stock at two or three different points would be loaded earlier, to be taken to a division point, there to be put into the through train, and it is true that that stock would be loaded from an hour and a half, perhaps, to two hours earlier; but the 20 cars of stock, as illustrated, would suffer a delay in making those three stops, and if the time was pretty close to get to the market, the entire 23 would not reach there, but by having the three cars loaded a little earlier, the entire train load, the 20 and the 3, likely would all reach the market. Mr. Stafford. What has been the effect of the operation of the 28-hour law so far as expedition is concerned while the stock cars have been in transit ? Mr. Bush. Well, it has had the effect of reducing train loads some- what to reach the market, to expedite the movement of the train. There are other instances where there are a great number of cars that are likely to require feed, water, and rest at yards that we have provided for that purpose, so great a number getting in there at so short a period that we have reduced the tonnage. In fact, we have made three trains out of two, and gotten those three trains in to make room for the balance that must be taken care of at the feeding point. Mr. Stafford. Then, as a general statement, you can say that the expedition of live stock has been increased since the operation of the 28-hour law? Mr. Bush. I think it has had a tendency to increase the speed somewhat. I don't think it has improved the service any. The stock shipper, you know, is very averse to unloading. He considers it quite a loss. Mr. Wanger. How long have you held your present position ? Mr. Bush. I have been general manager of the road smce October, 1, 1909. Prior to that, for s.even years, I was general superintendent. I have been with the company thirty-nine years. Mr. Wanger. How does the speed of stock trains at present com- pare with what it was ten years ago ? Mr. Bush. Well, it is considerably better. It is more reliable. There were instances ten years ago where we had on our railroad during the entire shipping season an entire movement of live stock that would hardly amount to what we now move in thirty days. Live-stock trains ten years ago were handled by smaller power, in smaller cars. The congestion at the marketing center was very much less. The density of traffic was 70 per cent less than at the present time. A train could leave a point, say, 500 miles from the yards and meet passenger trains that were scheduled at a rate of speed that womd permit of their taking the sidetrack to let the live-stock train pass them on the main line. Passenger trains have become so heavy and the demands of the public for faster time have become so great that it is quite out of the question to put passenger trains, through trains or local trains, on the sidetrack for our stock trains. BILLS AFFECTING INTERSTATE COMMEECE. 1063 Then, again, there is the speeding of freight trains. A stock train ten years ago could leave Savannah on a single track — it is now a double-track line — and reach Chicago or Franklin Park, 128 miles, and the only stops that it would be necessary for them to make would be for coal or water. In addition to that, in addition to the resistance due to heavier train movement, there are a great many other raOroads that have crossed that line. At that time there was only one railroad crossing at grade. At this time there are not less than seven. At all those points the speed must be reduced, even though they are protected by mterlocking plants and fixed signals, that the engineer may be able to stop his train if the signals are against him. So tnat I think the rate of speed to-day, while the train is in motion, is 10 to 15 per cent greater than it was ten years ago. Then, again, with the small train, say with a small engine handling 20 cars of stock, and the larger engine handling 25, there is more chance, a greater risk of a coupling becoming separated. They have been strengthened a great deal, but in the hurry to get out of stations the effort to make quick and sure stops has its tendency to weaken those fixtures, and after several applications of air and stopping the trains we break a knuckle or a coupling pin. I think all the operating offi- cers would say that the speed of trains while in motion between sta- tions, except on the adverse grades, is much faster now than it was ten years ago. Mr. Knowland. What amount of stock do you carry, compared with other roads ? Mr. Bush. We are the second or third largest stock-carrying road in the Northwest. Mr. Knowland. You have had, then, no general complaint as to the speed of your trains except in individual instances ? Mr. Bush. No, sir. Mr. Knowland. You have had no complaints from the stock associations ? Mr. Bush. No, sir. Mr. Knowland. And the complaints you have had have been from individual shippers ? Mr. Bush. Individual cases. Mr. Knowland. Have there been many complaints from them? Mr. Bush. Very few. Mr. Knowland. As a practical railroad man, you are firm in the conviction that the sixteen hours could not be maintained on stock trains, are you ? Mr. Bush. I am very sure that it can not be. Mr. Knowland. What speed would you say could be maintained? Mr. Bush. I do not think there should be any fixed now. Mr. Wanger. The report of the sohcitor of the Department of Agriculture for 1909 shows 39 cases, I think it is, as to the Chicago, Milwaukee & St. Paul, of penalties assessed under the 28-hour law. Mr. Bush. Yes, sir; I testified, I think, in eight of those. Mr. Wanger. Is it not practicable to avoid those suits ? Mr. Bush. Why, in answering that I believe I will have to say that if it was, we would not have violated the law. I will illustrate one of those cases to you. I testified in the case before Judge Landis. One of the cases was this : A car of horses was shipped from a station 1064 BILiiS AFFECTING INTERSTATE COMMERCE. called Neola, Iowa. He did not sign the request for an extension of eight hours,, bringing it up to the 36-hour limit. When the train reached a station known as Kirkland, where we have small feeding yards, we had exceeded the time by about forty minutes. The con- ductor called his attention to it — that was without the extension of eight hours — and requested that he sign a request extending the period to thirty-six hours, which he did. We then failed to get it to the stock yards, due to the fact that when we reached Franklin Park there was an accident between there and the stock yards ; but to do all that anyone could do, knowing that the track would not be clear for about an hour and thirty minutes, we took the engine of the train and the caboose, switched the car out and took it back to Kirkland. In getting back to Kirkland we exceeded the Hmit by thirty-eight min- utes. He put in a claim for damages, which we promptly paid with- out any investigation. He then notified the government inspector of our performance in the matter, and we were fined. We pleaded guilty and accepted the fine. In some of the other instances it was shown that when we got to FrankHn Park we did not have sufficient time, according to the aver- age time consumed in making those, runs, to get to the yards. We had no other place, without going back to Kirkland, to feed the stock. So we left Franklin Park with the stock, knowing very well that we could not reach the yards inside of the time limit. I think during that same period all the western railroads were brought before the court. Mr. Wanger. What is the distance between Kirkland and Franklin Park? Mr. Bush. I do not just recall, but I think I can figure it out in a moment. It is about 53 miles, as I recall it. We discipline our trainmen, yardmen, and station agents — every employee concerned in the handling of stock — for their failure to ascertain if there is sufficient time after reaching the first feeding point to make the deliv- ery and keep within the law. Mr. Stafford. Were there any exceptional climatic conditions that interfered with the delivery of the cars within the 28-hour limit in these cases you refer to ? Mr. Bush. At the time mentioned; no, sir. Mr. Stafford. You said the other roads had suffered the same way? Mr. Bush. They did, at the same time. I think the Northwestern road had several cases. Am I right about that, Mr. Morse? Mr. Morse. We had several during that same year. Mr. Bush. But it was during the same period. The Rock Island, the Burlington, the Northwestern, and our road had several cases; not that that is any excuse for the Milwaukee road. It is simply to show you that all of the lines were interested in the movement, and each one was making an honest effort; and, considering the amount of stock handled, we were very successful in meeting the requirements of the law. I might add that in the majority of cases the delay was between the point where we leave the main line, and the handling of the stock over the belt line. We figure to use three hours. We have eight hours from Savanna to the stock yards. We unload .and feed at Savanna, and then we attempt to make that first 128 miles in five hours, and the last 22 miles in three hours. BILLS AFFECTING INTERSTATE COMMERCE. 1065 It was claimed in that case, and the decision distinctly stated, that the railroads laiew of the possibilities to move promptly between Franklin Park and the yards, and, as far as our road was concerned, also between Western avenue and the yards, and that even though we had the allowa-nce of three hours, which was a little more than the average time consumed by the roads in the given period, that would not excuse us. STATEMENT OF W. E. MOESE, GENERAL SUPERINTENDENT CHICAGO AND NORTHWESTERN RAILROAD COMPANY. Mr. Morse. Mr. Chairman and gentlemen, as concerns the Chicago and Northwestern Railway, we agree with the position assumed by the Milwaukee road and others here that it would be an impossibility tor us to in all cases average a minimum of 16 miles per hour with stock trains. I will undertake to avoid repeating what Mr. Bush has said in regard to the reasons for that disability, and try and enumerate a few that have not been mentioned, for which the shipper himself is largely responsible. We have a great deal of difficulty with the shipper in loading his stock promptly. For instance, you start a stock train out from the station with two or three cars. They have cars to pick up at suc- ceeding stations. It is a very common occurrence for the shippers at those succeeding stations to be late in loading, and that holds the other stock. I have in mind cases where in Dakota and Iowa this fall our stock trains were held for two hours for shippers to trade stock. They would get to bartering their stock after the train would get there and trade for two hours before we could get that stock train started again. Mr. Stafford. Do you recognize any practice whereby the ship- per will hinder the running of the train under those conditions you have stated? Mr. Morse. We imdertake to avoid it, but we do not always have an officer on the train. It frequently occurs, and I could enumerate cases in evidence, if necessary. Mr. Stafford. What is the practice as to collecting these stock cars on branch lines, as to whetner the cars have to be already filled before the train arrives? Mr. Morse. Our instructions to agents are that the stock must be ready before the train arrives, but we are not able to enforce those instructions. Mr. Stafford. Why not? Mr. Morse. If you will pardon me, I will explain. As a matter of fact, there is no class of shippers on the railroad to which the rail- roads .uniformly cater to the extent they do to the stock shipper, in every respect. Of course our instructions are to the agents that the stock must be loaded before the train arrives, but as a matter of fact we rarely run away from a car of stock if it is not finished loading, or if we have not started loading. Sometimes the stock is late in arriving. It may not be the fault of the shipper. Mr. Stafford. Is that the same practice you follow as to dead freight? If a carload of dead freight is not ready, do you wait until it is ready for shipment? 1066 BILLS AFFECTING INTERSTATE COMMEBCB. Mr. Morse. No ; not at all. We do not wait for dead freight. Mr. Stafford. Will you, then, explain why it is that you give this special consideration to the shipper of stock? Mr. Morse. Well, it is because the shipper is not always at fault, as I started to say. The man from whom He bought the stock may be late in delivering part of it. They very rarely buy a car of stock from any one farmer. He may have bought this stock to be delivered at 4 o'clock in the afternoon, and the bulk of the stock will be there; but there will be one farmer with a load or two, or a drove, late, and he has to wait until it gets there. The stock may be unruly. Very frequently there is a great difference, as any man who is familiar with loading stock knows, as to the loading of stock. You may load a car of stock in fifteen minutes, and it may take you two hours. It depends upon the stock. It depends upon the hour of the day. There are a great many things that the shipper has no control over that delay the loading of the stock and the movement of the stock that may be in the train at that time. The other disability that the shipper is, we sometimes think, respon- sible for is the fact that they concentrate their shipments. Last Sunday night we brought into Chicago between six and seven hundred cars of stock. We have brought in 1,100 cars in one Sunday night, •requiring from 20 to 25 trains to handle them. Out of 110,000 cars of stock delivered to the Union Stock Yards in one year, that I recall, 55 per cent of it arrived on Monday morning, 25 per cent of it arrived on Wednesday momina;, and only 20 per cent the balance of the week. We handle about 160,000 cars of stock a year, and that ratio will hold good uniformly. The result is that you have 35 or 40 stock trains, or from 25 to 40 stock trains, in a fleet. You have delayed passenger trains and mail trains that must be let by, and, despite any efforts you can make, you will have bad luck in some of those trams. We could not pos- sibly make 16 miles an hour. Our stock schedules from the &Iis- souri River to Chicago are based on a contemplated speed of 22 miles an hour. W^e make it with probably about 70 to 75 per cent of the trains. Our stock schedules in Iowa and in Illinois on the main Une, the through movement, are based on about 20 miles per hour. On our branch lines, at which 75 per cent of our stock is assembled — and by branch Unes I mean local loading; "there is not over 15 or 20 per cent of our stock received from connecting lines; practically 75 to 85 per cent of it is loaded on the Northwestern rails — on the branch hues, where this stock is loaded, the time, excluding the stops, is about 17 miles per hour. Including stops it is about 8 or 9 miles an hour, and this stock comes in from these branch lines, as Mr. Bush has explained, in small lots, and it is absolutely essential for all the main- line trains to consolidate with these small lots. Now, there is another point with reference to the tonnage. The average stock train on the Northwestern road is from 25 to 27 cars. In the last ten years our tractive power has increased with our loco- motives 100 per cent, while our stock train has increased not to exceed 20 per cent. At the present time our stock trains average about 40 per cent, not to exceed 40 per cent, of the capacity of the locomotive. By the capacity I mean the dead freight capacity. I have some figures here which I will not take the time to read BILLS AFFECTING INTERSTATE COMMEECE. 1067 Mr. Stafford. When you mention the dead freight capacity as your basis, do you mean the capacity of the engine or the average capacity of your dead freight trains? Mr. Morse. The rating of the locomotive for dead freight. Mr. Stafford. What is the capacity of the tractive power for dead freight trains? Mr. Morse. What I mean is this. If an engine in dead freight is rated at a thousand gross tons we would not handle over four to five hundred tons of stock. Mr. Stafford., How much would you handle of dead freight? Mr. Morse. We would handle a thousand tons. You see, our dead freight trains in Iowa and Illinois will run about 40 cars. With stock it will run from 20 to 25 cars. Now, it seems to me, gentlemen, that, as Mr. Bush stated, the railroads are more interested than anyone else to expedite this stock, because, as a matter of fact, they are very glad to get it off their hands after they get it. It destroys the movement of all other trafhc practically. In some cases it takes precedence over passenger trains. Mr. Knowland. Has the speed been increasing or decreasing? Mr. Morse. The speed between stations has been increasing, but there is a point that Mr. Bush touched upon with which you are possibly not familiar. The introduction of safety devices, block signals, interlocked railroad crossings, and all those things, while they safeguard the operation of trains, retard the uniform movement of those trains. Mr. Knowland. Your road is double-tracked, is it not? Mr. Morse. It is double-tracked and electric-locked to Omaha. Mr. Knowland. You could make a greater speed than a single- track road? Mr. Morse. No; because the density of traffic is proportionately greater. Moreover, as I stated before, a railroad that is block- signaled and has interlocking plants and the more modern appliances has slower train movement between two given points. They wiU run faster between stations, but they necessarily must slow down for these signals. Mr. Stafford. That is the rule for freight trains, but it is opposite in effect as to passenger trains ? Mr. Morse. No; I do not think so. Mr. Stafford. The same applies to both? Mr. Morse. I think so. Mr. Knowland. Have you had many complaints from shippers on your road ? Mr. Morse. Only individual complaints. Mr. Knowland. What percentage of the stock carrying do you have ? Mr. Morse. I think we rank first or 'second. As I said before, we handle 110,000 to 120,000 cars a year into Chicago. We handle a large amount in to Cudahy, in Omaha, and to Sioux City. Mr. Knowland. You have had no general complaint? Mr. MoESB. No general complaint. Mr. Knowland. Have you had much individual complaint? Mr. Morse. No; this winter we have had considerable on account of the bad weather, but ordinarily we do not get very many com- plaints. 1068 BILLS AFFECTING INTERSTATE COMMERCE. Mr. Knowland. Have you had any complaint from the associ- ations ? Mr. Morse. No, sir. Mr. Stafford. What is the character of these individual com- plaints ? Mr. Morse. Oh, they would have complaints where the engine would fail, or they would get a car off the track, or it would be foggy in the terminals, and the trains could not move rapidly in the ter- minals, and the man did not make the market. We get a complaint usually when a fellow reaches a falling market, but we never get any when he reaches a rising market, no matter how late he is. Mr. Stafford. The proponents of this measure complain that there are delays in transit whereby the stock trains on the branch lines would move only at the rate, sometimes, of a mile an hour, whereby the individual could walk faster than the train and help push it along. Are there any instances of complaints of that character brought to your attention? Mr. Morse. I never heard of them. If you will think a moment, under the agreement of the railroads with their organization, . and most of the railroads have that agreement, there is a movement of 10 miles per hour required, or a penalty. They penahze the railroads when they do not make 10 miles per hour with their freight trains. They penahze them through their organization, the engineers, fire- men, conductors, and brakemen. Therefore it behooves the rail- roads to strive to make at least 10 mUes per hour. Mr. Stafford. That penalty is not imposed when there are good reasons existing for not going ahead ? Mr. Morse. Oh, yes; m every case. Mr. Knowland. They also complain that you sidetrack live stock for fruit trains. Is that so ? Mr. Morse. Well, I have no recollection of that. I do not think it is true. The schedule on the stock trains, as a matter of fact, is higher than fruit trains, and we have many cases where there are stock trains run from Clinton to Chicago ahead of our passenger trains, with orders right ahead of the passenger trains, 139 miles. Now, we have some delays of stock that were touched upon by Mr. Bush, I believe, but it is very pertinent. Our stock is dehvered to the Chicago Union Stock Yards Company at Ogden avenue. There are several railroads that use these tracks in common. Their own trains, their own cars, and their own engines take the stock to the yards; but the Northwestern, or the roads that use these tracks, are not owners of the tracks and have no control over their operation. It is very badly congested there, particularly on a foggy morning. Mr. Bush stated he had known 2,000 cars to be brought in there on a Monday morning. I have known 3,000; and they will come in there in six or seven hours. The stock shipper objects to reaching Chi ago or reaching any other terminal before 2 or 3 o'clock in the morning. He wants to reach there between 2 or 3 o'clock and 8 o'clock. He does no't want to reach there at 11 p. m. or 12 o'clock midnight. That is too early. Mr. Stafford. Why does he regard it as too early? Mr. Morse. He thinks it is a waste of time. The stock is unloaded, and the market does not open, you understand. I do not know that I could exactly answer that question. BILLS AETECTING INTERSTATE COMMEKCE. 1069 Mr. Stafford. It is not as convenient for him personally as a later hour? Mr. Morse. That is it, but he will strenuously object if you de- liver his stock to the market, the Union Stock Yards, before 12 o'clock, as a general proposition. The result is that all this stock is massed in a few hours. If it happens to be foggy and you have a hundred trains, all using the same tracks and all commg up and unloading at the same chute, you can appreciate that the movement is very slow. The trains proceed very carefully as there is very dense fog in that vicinity. There is no place I know of, except pos- sibly London, that has worse fogs than Chicago. We allow four hours for the terminal movement. Mr. Richardson. As I came in the room a moment ago I heard you make some remark about the railroad being penalized? Mr. Morse. Yes; with their organizations. Mr. Richardson. For not running more than 10 miles per hour? Mr. Morse. For not making 10 mUes an hour. All the western schedules are based upon the payment of 10 miles per hour. Mr. Richardson. That is applicable to the transportation of stock? Mr. Morse. No; to everything; to all freight. Mr. Richardson. Do you pay that penalty frequently? Mr. Morse. We have to pay it if we do not make it. Mr. Richardson. And you do not make it at all in stock cars loaded with stock on branch lines, do you ? Mr. Morse. No; not as a general proposition, on branch lines. Mr. Richardson. Some gentlemen have stated here that under no circumstances could you make 10 miles an hour on branch roads, where they gather the stock chiefly? Mr. Morse. No; they can not. We do not. Mr. IlICHArdson. And yet under the law you are penalized? Mr. Morse. Not under the law. You misunderstood me. It is an agreement with the labor organizations. It is called overtime. For instance, a crew going 80 miles will get 100 miles for it, or ten hours, based upon the 10 miles per hour. If they do not make that 80 miles in ten hours, you pay them 10 miles per hour for every hour over that. It is an agreement with the labor organizations, the engineers, firemen, conductors, and brakemen. It is not the law. Mr. Richardson. That has a bearing, then, upon the sixteen-hour matter ? Mr. Morse. No; it has the bearing that the railroads are under- taking to make at least 10 miles per hour. There was a question asked that brought out that proposition. Mr. Richardson. I was not in here when you brought it out. Mr. Morse. Therefore the railroads are undertaking to make at least 10 miles per hour with all their freight, whether it is dead freight or what it is. Mr. Richardson. By agreement with the labor organizations? Mr. Morse. And they are penalized if they do not do that with the labor organizations. Mr. Richardson. You pay the labor organizations? Mr. Morse. We pay them overtime, when they do not make the 10 miles per hour. Mr. Stafford. They do not pay the labor organizations. Judge. They pay the members of the crew. 1070 BILiS AFFECTING INTERSTATE COMMERCE. Mr. Richardson. I understand. You just pay the employees? Mr. Morse. That is all. Mr. Richardson. It would have no relation to switching engines gathering up stock cars and assembling them? Mr. Morse. No; nor on branch lines, under 70 miles. Mr. Kennedy. It is a rather important thing for us to know whether the speed could be maintained, whether that would be pos- sible. Mr. Morse. As a general average, you know, we make with our full stock trains 16 miles an hour, but there are so many cases that come up where we could not make that time that to be penalized by a fine would be very burdensome. Mr. Kennedy. Sixteen miles an hour, as a general average on all your trains would be regarded as rather good practice, would it not? Mr. Morse. It would be too fast for the pick-up train. Mr. Kennedy. I am talking about the average. Mr. Morse. No; I do not think it would. For instance, the Northwestern road, which is one of the heaviest stock-carrying rail- roads, as I told you before, originates 75 to 85 per cent of its stock. Our Sioux City division will, on Sunday, load 200 cars of stock, on that one division, and it is a small division. Now, that stock is loaded on various fines, the Mondamin line, the MoviUe fine, the Missouri Valley fine, the Lake City line, and it comes into the main fine of the Iowa division at Carroll in the Missouri Valley. That stock can not make an average of over 10 miles per hour on that division. When it struck the main fine it would make 16 or 18 miles per hour. Mr. Kennedy. Then you think 10 miles per hour would be too high a minimum on that line? Mr. Morse. I would not say that. I do not think it is necessary. I really think it is unnecessary to estabfish a minimum. The rail- roads, as I said before, and I say that earnestly, have no class of traffic to which they give the attention that they give to the stock traffic, except the passenger and the mail. Mr. Richardson. In that matter of being penalized for not making 10 miles an hour, are you allowed any explanation for reductions by reason of accidents that are unavoidable and the work of God and storms ? Mr. Morse. None whatever. Mr. Richardson. You have just got to come up and pay, anyhow? Mr. Morse. Yes, sir. Mr. Richardson. How long has that kind of agreement been in existence? Mr. Morse. Ten years. It will amount to from 5 to 10 per cent of the pay rolls of many of the railroads. Mr. Kennedy. You made a statement a while ago that I was sur- prised at. You said you thought these stock trains, keeping to the subject, could make as good time on these single-track roads as on the double-track roads. Mr. Morse. I think they can make better time in some instances. Mr. Kennedy. That rather surprised me. I supposed the meeting and passing of other freight trains would delay them. Mr. Morse. I know that is a surprising thing. I know the aver- age layman and some railroad men who are not m the transportation department think a double-track railroad wiU move the trains more BILLS AFFECTING INTERSTATE COMMERCE. 1071 rapidly than a single-track railroad; but usually they do not build two tracks until they have the traffic for them, and two tracks that are loaded to their maximum will not move the trains as fast as one track that is loaded to its maximum. Mr. Kennedy. That is, on the single tracks you can sidetrack your dead freight and give a clear road to the cattle trains. Mr. Morse. No; I do not mean to say that. I mean to say that on a single-track railroad handling half the stock, they would be able to make better time than a double-track railroad handling twice as much stock, provided the double-track railroad had other passenger trains in addition in the same ratio as the single-track road — twice as many. These passenger trains will block up and they have to pass them. I do not know that there is anything more I have to say, gentlemen. Mr. Wanger. We are very much obliged to you. STATEMENT OF W. L. PARK, GENERAL SUPERINTENDENT, UNION PACIFIC RAILROAD COMPANY, OMAHA, NEBR. Mr. Park. I think, gentlemen, to save your time and to get at this quickly, I might give you a concrete case of the density of traffic and the impossibility of making 16 miles an hour net on a single- track railroad. These will be the actual conditions as they exist on one freight district of the Union Pacific Railroad, between North Platte and Sidney, 120 miles long. We have scheduled on that district 2 fast mail trains, 3 overland limited trains, and a total of 18 mail and passenger trains. They are spread over the' twenty-four hours, and you will observe that is an hour and fifteen minutes apart, if they are equally spread. Mr. Knowland. That is going both ways ? Mr. Park. Yes, sir; there are 9 in each direction. A stock train, under this proposed law, ruiming 16 miles an hour would consume seven hours and thirty minutes. The train dis- patcher, in order to protect himself and the road against the con- tingency of a delay occurring at the last end of the run, which might be caused by a hot box or something occurring to the engine, would need to establish a basic rate of 18 miles an hour. That is customary where you want to make a certain rate of speed. You will schedule the tram a little bit faster to protect against a contingency at the end of the road, and, of course, having a fine or penalty staring you in the face, it would be done in this case. That would make your running time six hours and forty minutes. Now, the federal law as to safety appliances requires a very rigid inspection of some 125 different parts of cars. We made on the Union Pacific a short time ago an actual test of how quickly that could be done, and 6 men employed consumed fifty-seven minutes and ten secondsan inspecting 8 cars. That for an average stock train of 32 cars would be three hours and forty-two minutes. Of course we do not make in that case the same rigid inspection. We, as I might say, sneak out of it and take our chances; but it would be fair to allow us at that district terminal, for changing the engine and caboose, this inspection, and the terminal delay naturally occurring there. That reduces your time to five hours and forty minutes. 1072 BILLS AiTBCTING INTERSTATE COMMERCE. Now, the American Railway Association is an organization that governs the practice of all the railroads in the United States. I think there are 230,000 miles of railroads represented in that organi- zation. They have their own rule committees and other committees that prescribe good practices. That is very carefully gone over by other railroad officials in all parts of the country, and it centralizes in this American Railway Association. They say in order to operate a railroad safely, a freight train must clear a passenger train or a mail train a specified number of minutes. If our stock train met only one-half of the passenger trains going over the road and let only one-half of them pass it, that would con- sume two hours and fifteen minutes, and you could very easily get a combination where they would meet a great many more trains than that, the passenger trains not being evenly spaced. That would reduce the time two hours and fifteen minutes, or three hours and twenty-five minutes on your schedule. Then it would be very proper and necessary to allow twenty-five minutes for coal and water for the locomotive and a running inspec- tion of the train which is made at the stations to see whether there are cracked wheels or other defects in the running equipment which might put the train in the ditch; and there under practically a mini- mum condition you have three hours actual running time on that 120- mile division, which is 40 miles an hour. That is entirely too fast to run a freight train, and I think if such a rate of speed were attempted and maintained it would be injurious to the stock, particularly where you have a great many curves, throwing the cattle and sheep from one side of the car to the other and bruising them up. On the Union Pacific we try to make an average of 20 miles an hour with our stock. We set that figure for our superintendents and dis- patchers. We start at an elevation of about 4,000 feet at Ogden and ascend to 8,011 feet at Sherman, the siunmit of the Rocky Mountains. On that part of the road, which is about 500 miles, we prescribe a speed of 17 miles an hour. From Cheyenne to Omaha, on a descend- ing grade, going down from 8,011 feet to about 1,000 feet, we prescribe a speed of about 23 mUes an hour, which gives an average speed from Ogden to Omaha, which is approximately 1,000 miles, of 20 mUes an hour; but it is impossible for us to make that time. We make it in a good many cases, and I could bring you a good many complimentary letters that we have received from stoclmien of splendid rims that have been made. We do make some bad ones. We may have a combination of circmnstances against us. It may be an opposing train, something the dispatcher could not foresee, a train in the oppo- site direction breaking down, and where he is handling a great many trains right up to the capacity of the railroad, before he can catch up with his work and readjust the schedule, this stock train may have suffered; and under such a law there could be no way we could explain that. We would simply have to accept the penalty. I have been connected with train service intimately, as a brakeman, con- ductor, assistant superintendent, superintendent, and general super- intendent for thirty-five years, and I would be willing to stake my reputation, if I have any, as a railroad man that it would be utterly^ impossible to make a minimum net speed of 16 miles an hour. BILLS APB-EUTING INTERSTATE COMMERCE. 1073 Now, I think perhaps it would be entirely possible to make an average net speed throughout the entire season of 16 miles an hour. That might be possible. Some trains we would run 10 miles an hour under certain conditions. Others we might run 25 miles an hour; and I think it is quite probable that the figures thrown together for any of the roads would indicate an average of some- where near 16 miles an hour. Mr. Stevens. Would it change conditions any — make yoxi liurry up any — if we increased the penalties on you ? Mr. Park. I think not, sir. I think we would just have to sub- mit. The gentleman who just preceded me said they used every effort to get stock over the road. It is a preferred business with us. We have spent several hundred thousand dollars in the last ten years on the Union Pacific to provide special facilities in stock yards that are modern, up-to-date. We have spent $40,000,000 to better our facilities in double tracks, sidetracks, and other facilities, all of which is in the direction of helping the stock trains; and our only complaints come from the congested main line and the single-track portions. I will say that we very promptly pay for any claims that we inadvertently or otherwise delay a tram. There is no question about the settlement. The railroad company stands it. It is not the shipper. We have striven hard to avoid the penalties or to keep within the 28-hour law. I think since that law has been in vogue there have been fines imposed against the Union Pacific in 11 or 12 cases. Mr. Richardson. The stockmen are complaining more about the cattle suffering under the violation of the law which requires them to be unloaded every twenty-eight hours than they complamed before, they say. Now, that is a fact. There is no doubt about that, because there is no provision made for any minimum rate of speed to be made, and you can run them twenty-eight hours and not go 10 miles. What suggestion have you to meet that complaint ? That is a good complaint. The raUroads are not required to make any particular rate of speed in order to reach a place where they can put the cattle off at the end of the twenty-eight hours. They can not keep them there longer than that unless special permission has been granted. How would you meet that defect, that complaint, and that trouble ? Mr. Park. I think the 28-hour law has helped the railroads out of some difficulties. Mr. Richardson. And you put the cattlemen into others? Mr. Park. Yes. Out on the deserts of Wyoming we have some very poor water. At Laramie we purchased some 10,000 acres of grass land for the grazing of sheep, and we built the stock yards on the bank of the Laramie River. All of the stockmen made a special effort or request to get their shippers to that locality. Mr. Richardson. Under the 28-hour law? Mr. Park. Yes. If their man was at Rawlins, where there is practi- cally no grazing, 1 18 miles east of Laramie, and he had six hours to go the 118 miles to Laramie, a choice place to unload, he would feel very much aggrieved unless we took nim through. I think one or two of the cases v^here we confessed judgment and plead guilty were cases where in the middle of the night we were implored by the 23738— PT 18—10 4 1074 BILLS AFFECTING INTERSTATE COMMERCE. stockmen to take them along to this particular station, Laramie, and we felt ourselves that it was humane and proper to take them to that locality rather than to try to get them out in the night, when it is difficult to unload them, and perhaps they would stand there at the stock yards until daylight oefore they could be unloaded, whereas by daylight we would have them at the favorite grazing ground, and they would unload easily. I am quite sure in those cases it was very much more humane to have gone an hour, perhaps, over the time and gotten them to that locality. I think one or two of these cases were occurrences of that kind. We confessed our guilt and paid the fihe. Mr. Richardson. Would it occur often in the case of the trans- portation of stock in compliance with the law requiring you to unload them every twenty-eight hours that you would sometimes put them off at places that would be totally inconvenient and not prepared to take care of the stock? Mr. Park. When the law was first made effective, we had our dis- abilities in that particular, but we went at it veiy promptly, and at every one of our district terminals, 125 miles apart, approximately, we put in modern, up-to-date stock yards; but at such localities as Green River and Rawlins, on the desert, there is absolutely no graz- ing, nothing but sagebrush. We have good water. At Green River we have piped the water from the river to the yards, at a cost of fifteen or twenty thousand dollars. At Rawlins we have water piped 16 miles, from Fort Steele, at a cost of 1300,000. Of course, we use that for our locomotives, but that puts mountain water into the stock yards. Young lambs that are taken from their mothers and loaded on cars probably will not drink out of troughs in those locali- ties. They will drink out of a running stream. The shippers hand- ling stock that are so immature as the newly weaned lambs are of course anxious to get to a certain locality where they will drink; and if it is impossible to do that under the 28-hour law, I think it would be really inhuman to take them off before we got there. Mr. Richardson. Then the real situation is just about this, is it not, that now comes before the committee? Ihe stockmen say, in effect, that the nonenforcement of the 28-hour law happens more than it ever happened before, and they come up and ask as a remedy for that that Congress, by this bill, prescribe a minimum rate of sixteen hours, so as to meet that. Jhe railroad men say that is absolutely impossible, that it can not be done, physically nor otherwise, and that is about the situation. Mr. Park. That is the situation as I understand it. Mr. Richardson. That is the situation you bring to this com- mittee ? , Mr. Park. Yes. I understand that the National Woolgrowers at Ogden indorse the sixteen-hour law. The Wyoming woolgrowers at Gheyenne had the same proposition presented to them, and they refused to indorse it, appreciating the impossibilities from the rail- road -view point. I understand also that while it was indorsed at Denver a year ago at the meeting of the National Stock Growers' Association, it was up again this year at a recent meeting, and they declined to indorse it. Mr. Richardson. Is it the humane society that is requiring this? BILLS AFFECTING INTERSTATE COMMERCE. 1075 Mr. Park. I understand the humane society have been brought into it, but I read the report of the hearings here, and Doctor StiUman's talk on Friday last, and I think he has not the right view point. Mr. McCabe, of the Agricultural Department, says he knows very Uttle about it from a railroad view point, although his father is one of our fensioned engineers on the Union Pacific. He simply looks at it, think, from a wi;png view point! Mr. Wanger. The American Cattle Association, at its annual meet- ing this year, adopted a resolution in behalf of conferring power on the Interstate Commerce Commission to determine a minimum rate of speed in naoving live stock, did it not ? Mr. Park. I understood that at Denver a year ago they had done that, but at the last convention, which was only two or three weeks ago, they did not. I may be mistaken about that. Mr. Wanger. I think you are. Mr. Park. I may be. I know that one of the witnesses who appeared here on Friday is quoted in the hearing as having stated that such a resolution was passed in 1908. I presume from that that if one had been passed recently he would have referred to it. Mr. Knowland. You said you received several letters commend- ing you for the expeditious manner in which cattle were handled. Have you received many complaints relative to delays ? Mr. Park. We receive some complaints. We make some bad runs occasionally and receive some complaints. We always try to remedy them just as quickly as we can. We make the shipper good if he has lost anything on the market. We do not hesitate to straighten it out as quickly as possible. Complaints are not numer- ous. They seem to emanate from a particular class. I should say that they were those who bought stock and shipped them and sold on the other end. They are not the stock growers. Mr. Knowland. Speculators? Mr. Park. Yes, sir. Mr. Faxjlkner. How do the complaints compare with the number of shipments ? Mr. Park. I have a telegram here from my office in reply to an inquiry by me. I left very suddenly at the request of the gentlemen in Washington, and I had no time to prepare for this hearing. The telegram says : For the year ending June 30, 1909, the freight revenue from live-stock shipments amounted to $2,534,000, or 7.67 per cent of total earnings. Of this, interstate ship- ments estimated about f], 205,000, or 3.66 per cent of total earning.s. That means that the stock business of the Union Pacific road amounts to 3.66 per cent of all the freight business that we handle, and it shows quite clearly that to discriminate any more than we do now in favor or the stock would work an injustice to the large amount of business that, in a great many cases, is of equal importance. I read here in the hearing the statement that fruit trains pass stock trains. That is not so. There might have been a disabled engine or some peculiar circumstance that would have caused a fruit train to go by a stock train, but as the gentlemen from the Milwaukee and the Northwestern roads have stated, and it applies to the Union Pacific, otitside of mail and passenger trains, stock h?is the preferred move- ment. We very often endeavor to consolidate fruit and stock, because both are of a perishable nature, and run them on equally as 1076 BILLS AFFECTING INTEESTATE COMMBB.GE. good time, but our stock trains move much faster than the fruit shipments. Mr. Wanger. Mr. Gooding, of Idaho, stated to the committee that two years ago the distance from liis place to Chicago was made in eight days, but that now it takes ten or twelve days to make the run. Mr. Park. I think that is a rather general statement. Four years ago I took an engine and one or two cars, and took Mr. Gooding and Mr. Nolan, of Chicago, a commission man, and oneT)r two other stock- men — they were a committee of the National Wool Growers' Associa- tion — over the road for the express purpose of endeavoring to do something which in their opinion might help the situation — that is, to get the benefit of the opinion of these men as to what we should do on the Union Pacific to help matters. After going over the' entire sys- tem, they saw our plans for the improvements in the stock yards and what we contemplated in the double tracking, and I believe it was their report that they could suggest nothing that was not being done on the Union Pacific. Upon the completion of these improvements they saw that they would have very little to complain of. We were out some two weeks. Now, it is my impression that Mr. Gooding has had a very large number of good runs. He is a man that we generally look out for when he comes down over the road, because he always complains. He never misses an opportunity to complain, and if we can help it we do not lay him out, although I do not say we give him any partic- ular preference over other shippers. Mr. Kennedy. You do not think it wise that we should attempt to fix any minimum rate of speed? Mr. Park. No; I think not. I think if the railroads are left un- hampered and left to solve these problems as they are earnestly endeavoring to do, by double tracking, building additional yards, and facilities for handling the stock, the complaints will diminish in the West as they have in the East, where they have two, three, and four tracks upon which to operate the trains. The railroad building in the West has been very rapid. We have laid down a good many rails on contour lines and under conditions that were perhaps not the best; but the business necessities seemed to demand it, and we are now bettering those conditions. As I say, we have spent over $40,000,000 on the Union Pacific, and the most of that between Omaha and Ogden on 1,000 miles, to better the conditions as they exist there. We have 40 per cent of it double tracked, and we have the rails and ties and all material ready to double-track the balance ; but it is only a question of labor and our ability to work the steam shovels to get out the gravel when that will be accomplished. Mr. Knowland. You will double track the whole system? Mr. Park. From Omaha to Ogden; yes, sir. Mr. Knowland. That is as far as you run, is it not? Mr. Park. Yes. We have a line from Kansas City to Denver and from Denver to Cheyenne. Mr. Knowland. I mean west. Mr. Park. Yes; that is as far as we go west. Mr. Wanger. Mr. Gooding said; In the movement of 8tocl* from our western country down to the yards in Omaha the railroads have no competition ; but at Omaha, where there is competition, our stock is transported from that point to Chicago at the rate of 20 miles, and yet on the Union Pacific they will drag on at 8 or 10 miles an hour. BILLS AFFECTING INTERSTATE COMMEECE. 1077 Mr. Pakk. He also stated further along in that hearing, I believe, that there was no double track between Chicago and Council Bluffs. The Northwestern is entirely double tracked. The Burlington is almost wholly so, and the Rock Island has a large amount of double track. Mr. Knowland. We. have just heard that double tracking did not make any difference. Mr. Park. I did not state that. I think that Mr. Morse's point of view was that you could get so much business on a double track that you would have as much trouble as you perhaps ever did previously on a single track; but the same amount of business certainly can be handled much easier on a double track than it can on a single track. Is not that true, Mr. Morse ? Mr. Morse. If you remember, my statement was that if a double- tracked railroad handles twice the traffic that a single-track railroad handles, the single-track railroad would get a train over the railroad faster than the double-track railroad, with twice the traffic. Mr. Knowland. They do not generallj^ have the double track, though, without twice the traffic. Mr. Morse. No; that is what I said. They do not build the double track until they have the double traffic. Mr. Park. If the chairman will permit me, I would hke to read some of the obstacles, other than those I have mentioned, that operate against the maintenance of the schedule. No. 1 would be temperature in mountain territory, cold weather; not extremely cold, but enough to slow up and make the wheels turn hard. Mr. Knowland. Is it more difficult to get up steam? I noticed, when I came east from California this year, we were about twenty- four hours late on the Overland Limited, and they claimed it was on account of the engine not being able to get up sufficient steam. Mr. Park. That perhaps was a boiler, or a mechanical failure,' although I think there is more difficulty in maintaining the steam pressures at high altitudes than there would be in the low altitudes. At that time, perhaps, we had a temperature of 40° below zero at Green River. Mr. Knowland. It was very cold, I remember. Mr. Kennedy. Some one spoke a little while ago about engines moving less rapidly at night than in the daytime. Mr. Park. Well, that would depend on the engineer. I think, judging from our mail trains, where we get the highest speed, that the engineer sees less in the night time and perhaps runs faster than he would in the day time. His attention is not diverted. He is looking ahead. I have never noticed any difference except, perhaps, it might be in cold weather, when the temperature would fall very much during the night. Mr. Kennedy. A curious fact has been lately demonstrated in the manufacture of iron, that a blast furnace with the same fuel will make more iron in zero weather than in damp, warm weather. The moisture in the air seems to affect it. Mr. Park. No. 2 would be the heavy wind velocities, retarding opposing trains. That might be very difficult of explanation as to a particular stock train. The wind might be blowing from behind the stock train and stiU retarding it in that it would be holding trains moving in the opposite direction that would each, in their turn, 1078 BILLS AFFECTING INTEKSTATE COMMERCE. delay the stock train, but it would be a thing that would be almost impossible to account for from the train sheets later, where they might be looking for an explanation as to why the stock train lost ten or fifteen minutes at each one of these meeting points that it ought not to have lost. The same thing would apply to minor accidents to opposing trains, causing unexpected delays to stock trains, brake beams coming down on a train, or hot boxes on the opposing trains. We have this experience in the operation of the twenty-eight hour law as it is now. The consequent delays arising from trains in the opposite direction affect the stock trains in particular, but still we can not use that as an explanation, although it is there and we can not get-away from it. The train is beyond the power of the dispatcher to give it further orders. No. 4 is the failure of the telegraph line intermittently, causing delays in getting out train orders, caused by fogs, lightnings, and storms. That is' very frequent. In the summer we have electrical disturbances in the high altitudes that will put our telegraphs out of commission for an hour or two, and it will perhaps come up again. We are installing a telephone, putting up two copper wires, through that territory from North Platte to Ogden, at a very considerable expense, a system of telephone train dispatching. We will have that completed in thirty days. 5. Failure of automatic electric signals, same causes as above, com- pelling trains to flag through blocks. 6. Drovers eating when trains would not be otherwise delayed. 7. Taking one or more cars to intermediate chutes to get stock up on their feet. 8. Rebilling at junction points with other lines. 9. Unloading part of a train for feed and rest, under the provisions of the present law, delaying balance of shipment that has time to go farther, causing numerous complications in adjusting the delays. 10. Waiting for drovers to get stock up on their feet while train is standing, and to get on the way car when the train is ready to move. 11. Speed restrictions of municipalities, some as low as 4 miles an hour. 12. Man failures — employees not responding to calls on account of sickness or fdr other reasons, causing unexpected delays in getting substitutes. 13. Stock trains bunching, delaying other trains at unloading points or getting through terminal yards. There are a great many other delays of a similar nature that are bound to make the service erratic, indicating the folly of attempting to regulate the movement of stock by hard and fast rules. These same climatic conditions affect the automatic electric signals, heavy lightning discharges or other climatic conditions putting the signals out of commission temporarily. I have seen signals that would hold a train ten or fifteen minutes. Under the rules the train stops at that signal and the brakeman goes ahead to flag and observe whether there is a train coming in the opposite direction and until he can see the next block so that it will be clear; and that signal immedi- ately after that will resume its function, and nobody win know what caused it to stop. BILLS AFFECTING INTERSTATE COMMEECB. 1079 Another cause of delay is drovers eating when the train would not be otherwise delayed. We find the drovers sometimes will at an intermediate station go over to the eating houses and get a warm meal there, and I presume they are justified in doing it; but we have to wait for them until they come back, and it might be thirty-five or forty minutes. Of course we could not explain that, and it would not be an excuse for not making this time, beicause we would probably be told to leave them there; but it would not do to leave them there, because they are necessary to keep the stock on its feet. Mr. Kennedy. When these complaints are made against you, does the commission have jurisidiction to excuse you from paying the fine ? Mr. Park. Under the 28-hour law? Mr. Kennedy. Yes. Mr. Park. No, sir; I understand that those cases are all handled by the Agricultural Department inspectors, and they report viola- tions to the Department 'of Justice, who bring the suits in the federal courts. Mr. Kennedy. If they report at all, then, there is nothing that justifies your failure to comply with the law? Mr. Park. We have our day in court. Inspectors of the Agricul- tural Department will find that we have exceeded the law, we will say, perhaps thirty minutes, some place. They have an inspector at each end of the district. Mr. Kennedy. They exercise some discretion as to whether to report at all or not ? Mr. Park. Yes, sir; but if that law was literally obeyed, there could not a stock train move over a rail. Mr. Kennedy. I understand that. Mr. Park. Because it is not necessary for you to take the time from the time you put the first sheep on a train of, say, 35 cars you might have. Mr. Kennedy. You have been saying "That would not excuse us," as though there was vested somewhere a discretion to excuse you for failure to perform. Mr. Park. Well, I think that no one, perhaps, has the power to excuse the violation of the law; but they seem to have made rulings — some one has made ruHngs — and that is true of the instance I just cited. We are permitted to take the time from the time the last animal is in the train until the first one is out at the other point, the unloading point. Mr. Kennedy. It would make it easier for us to make some sort of workable law in this matter if there were somewhere vested power to hear your excuses and excuse you where you had a good excuse. Mr. Park. I think so. I think if that was possible that the law would work out much better for the shipper, the humane society, and the railroad. I think we could arrive at somebody in a certain terri- tory with delegated authority to say, "that was right and proper; you should have taken those sheep over to this preferred water sta- tion, where they could get a drink, knowing that they would not drink out of the troughs where you did unload them, and that there was no grass there for them to" eat." The inspectors would admit that that was a humane thing to do, and we would feel that it was a humane thing to do, and the stockman would be sure of it. But while the law is so rigid, it illustrates the unwisdom, I think, of mak- 1030 BILLS AFFECTING INTERSTATE COMMERCE. ing a bard and fast rule. I fear that this proposed amendment would operate the same way; that we would be tied up more seriously than we are now, and I am very sincere in saying that we try to do the best possible with the stock trains, and I think all the railroads do that. This bugaboo about tonnage, there is nothing in it. We cut our ton- nage to perhaps 50 per cent of capacity of the engine, to handle stock; but there is a time in the fall when it is absolutely necessary to haul as near a full train as we can in order to keep congestion from occur- ring on our road. It is a question of getting the business from the railroad, the very best business. Mr. Kennedy. If the Interstate Commerce Commission, the parties to whom these complaints are made, could in some way be vested with the discretion and given judicial power to determine whether or not it was a wanton disregard of the law,^or the failure of machinery that no foresight could anticipate Mr. Park. That is true of the safety-appliance law. I think it will be admitted by all raihoad men that you could go out on any railroad and find these defects; but that law has been applied in a rational way, and the roads have been gradually getting better as to their care of such appliances, and they are touched up occasionally here and there to keep them in line. But I do not know what would happen if inspectors were put at every district terminal and kept there, and every violation of the law by the railroad was rigidly punished, because, as I said before, there are 125 parts in a car that come under the provisions of that law, and they are liable to work loose and fall off, and no human agency could keep them always in place. Mr. Faulkner. I would like to ask the witness whether it is not true that the courts have held that so far even as safety-appliance laws are concerned, there is no- discretionary power at all, and the law must be enforced if the report is made ? Mr. Kennedy. I understand that; but in the administration of the twenty-eight-hour law, have your cases been tried in the courts, or have you simply plead guilty and paid the penalties? Mr. Park. Well, we opposed the application of the law in a case in Wyoming. We took exception to the law in that we were not will- fully negligent. Our dispatcher was a citizen of Wyoming, we claimed had been there fifteen or twenty years, a man that was of good habits, and he was a good man, just as good as any other citizen of Wyoming. He had the duty of dispatching these trains, and by something which was beyond his control they went over the twenty-eight-hour limit. We claimed that that was not a willful act on his part; that he had exercised due diligence and foresight. Nevertheless, the train was on the road more than twenty-eight hours, and Judge Rider decided in our favor. That was taken to the Supreme Court, and I believe he was reversed. Mr. Kennedy. Yes. Now, suppose that we should provide in this law that you might plead in mitigation of damages, if not in justification, any excuse that you might have for failure, and fix a reasonable minimum. Mr. Park. Well, as I said before, I do not believe that a minimum would be necessary. I fail to miderstand how anybody can believe that the railroads are not trying to use this stock the best they know how. BIUJS AITECTING INTERSTATE COMMERCE. 1081 Mr. Kennedy. Wheu passenger trains are frequently coming in, where no one suspects the company's genuine effort to get its pas- senger trains in on time, it is no unusual thing for a passenger train to be six or eight hours late. It may be unusual, but it happens on every road. Mr. Park. Yes; that is true, and there are innumerable reasons for that. A train may run on its schedule very uniformly for several months, and then have an epidemic of causes that would sacrifice the schedule; and that would be true of the stock trains. You might go along successfully and comply with this law for a long time, and then have an epidemic of trouble that would give you a lot of fines. Another thing that has not been taken into consideration is repairs to the track. We frequently have broken rails, and repairing ballast, and slow orders; every railroad will have them sometimes, and they operate to slow the trains. But. the work has got to be done. Then there will be seasons of the year when the track will be clear and there will be no work orders, and you can make better time under those conditions. Mr. Wanger. What is your train schedule for stock trains on the main line ? Mr. Park. The bulk of our stock runs during the three months of the year, August, September, and October, and the trains are not scheduled in the time-tables for the reason that we will have 10 or 15 stock trains one day and only 2 or 3 the next, and it would be impossi- ble to handle them on a regular printed schedule; but the train dis- patchers handle them as extras, the same as other freight trains, inferior only to the passengers. As I said at the opening of my remarks, on the Union Pacific we have set 17 miles an hour from Ogden to Cheyenne, and 23 miles an hour from Cheyenne to Omaha. Cheyenne is about half way, so that it makes an average of 20 miles an hour; but we are not able to make that. I presume our trains during the entire season would average somewhere around 15 or 16 miles an hour. Mr. Stafford. What is the reason that makes this traffic excep- tionally heavy during the three months you mention? he railroads going into bankruptcy through ruinous com-petiti®i!i, do you?'. Mr. Knapp. I hope not. BIliS AFFECTING INTEBSTATB COMMEBCE. 1221 Mr. TowNSEND. You started in to express an individual opinion, with the understanding that it is your individual opinion, and you have suggested that one remedy perhaps might be through agreement. Have you any other suggestion to make ? The Chairman. Did the agreement that you referred to have refer- ence to an agreement merely as to the rate, or a pooling provision as to freight ? Mr. Knapp. Rates. I have sometimes thought that if I had the power I would get all of these railroad managers together and I would say: Here, you must agree on a fair differential basis of rates aa between these different porta. If you can not agree I will fix them myself, and then you try them for six: months or a yeai- to see how they work, and you may come back here and see if they need readjustment. In other words, I believe it is possible to maintain an import rate through the port of New York which is practically the domestic rate, and with differences through the other ports materially less than now prevail, and that I think is about all you can do, and all that is in the mterest of the country that you should try to do. Mr. Kennedy. I made a study of import rates as corapared with domestic rates on pottery, and the rate from Liverpool, England, to Chicago is substantially the same as from Liverpool on the Ohio River to Chicago and to other points on the continent. It is practically the same rate. And when you go further west the domestic rate jumps right up to the clouds, excluding our pottery from the Middle West. What was the occasion for that wonderful advance in the domestic rate beyond Chicago ? Mr. Knapp. I do not know. Mr. Kennedy. Is there any reason unless it be to help the foreign factory ? Mr. Knapp. Oh, railroads don't make rates to help foreign factories. Mr. Kennedy. They used to. Mr. Knapp. They make rates to get business. Mr. Kennedy. They used to discriminate between domestic pro- ducers and the pottery makers that import their pottery here from Americans in Germany and France who built their factories over there for some reason. Mr. Knapp. I have been led into a not very instructive talk, and all I have meant to say was, with the utmost respect, that I can not believe that the plan proposed in this bill, which creates a hard and fast rule that no export or import rate shall be less than the domestic rate, would be wise legislation. The Chairman. When I drew that section of the bill it was not for the purpose of committing myself to the proposition involved any more than to the other provisions of the bill, but it seemed to me that it was a matter that deserved attention from the legislative body. Present conditions have become weU-nigh intolerable. If we give to the commission power over these rates, wouldn't that answer the question as to the authority to make differentials, or would you, under the existing law, be required to make the same rate on domestic freight and imported freight to the same point ? Mr. Knapp. I don't think I care to say any more than I have upon that point. It would come, of course, to giving the commission power 23738— PT 21—10 3 1222 BILLS ATFECTIITG INTERSTATE COMMBKCE. to fix the minimum rate. I think there is very much to be said in favor of that. Mr. Kennedy. Wouldn't it be a good thing to iix the minimum and to give the commission a little power, at least, and fix minimum rates ? Mr. Knapp. I have often thought so. Mr. Kennedy. In the case of railroads where they compete with water carriers ? Mr. Knapp. I am inclined to favor that suggestion. Mr. Adamson. That might be disturbing something that God made, as remarked by some member of the committee a few minutes ago. Mr. Kennedy. The railroads have practically destroyed a utility of great importance that God made by discriminating against the traffic on the Mississippi River. Mr. Adamson. To that I object. Mr. Knapp. It seems plain to me that it is desirable. It^s in the interest of the country as a whole that this traffic, both export and import, should be distributed, and whatever plan will produce the most equitable distribution of that business as between the different lines and the different ports and at the same time restrain, so far as practicable, any unreasonable competition as the result with our domestic producers is a thing we should all want to accomplish. Mr. Kennedy. Do you think that thoroughgoing regulation of common carriers ought to give you power to stop destructive com- petition ? Mr. Knapp. Yes; that is my personal view. Mr. Kennedy. The conferring upon you of power to fix minimum rates would enable you to do that, wouldn't it ? Mr. Knapp. Apparently it would. Mr. Stevens. But that would establish a system of rigid rates, wouldn't it, that would be practically very hard to change in order to accommodate business conditions in the country ? Mr. Knapp. Yes; but I understood the question as put by Mr. Kennedy to imply not the fixing of a particular figure from a given port to any interior, destination, but it would work out a percentage relation or some other prescribed relation of rates as between the different ports. Mr. Stevens. But how could that be avoided ? If you have water competition, for example, on the Lakes, which would be the basis of fixing a line to the Central West, how are you going to avoid fixing a minimum rigid rate to meet that competition ? Mr. Knapp. Possibly you may not be able to in that particular case. Mr. Stevens. If you can not avoid it in that case, won't that system extend gradually ? Mr. Knapp. It might. Mr. Stevens. If that is done, do you think that the people of this country will allow you to fix a system of rates below which they can not get their products carried ? Mr. Knapp. I am only saying that there may be cases where I think it would be wise to fix a minimum rate. Mr. Kennedy. If we attempt at all to create that basis, then we will have to clothe somebody with discretion to act sanely in that regard. BILLS AFFECTING INTEE8TATE OOMMEHCE. 1223 Mr. Knapp. It seems to come to that. Mr. Baetlett. I want to ask you a question that does not relate tp this subject that is being discussed now. YoU were asked by Judge Richardson with reference to the power to originate rates, and this bill now under consideration seems to confer the power. Has the commission ever given any consideration to section 13 of the original act, which provides: Said commisBion shall in like manner investigate any complaint forwarded by the railroad commissioner or railroad commission of any State or Territory, at the request of such commissioner or commission, and may institute any inquiry on its own motion in the same manner and to the same effect as though complaint had been made. Now, has the commission ever investigated or determined whether or not they had the right to institute any inquiry on its own motion '*in the same manner and to the same effect as though complaint had been made ? " Mr. Knapp. There is no question about our very ample powers of investigation under that provision, and they have been frequently exercised. The point is that, in my opinion, certainly, and I think that is the view of most of my associates, we can not make an order under the fifteenth section in a proceeding instituted upon our own motion. We can investigate, get at all the facts, but we can not apply any remedies. Mr. Baktlett. That has been the construction of the commission? Mr. Knapp. Yes. Mr. Bartlett. Then the only amendment necessary, in the opinion of the commission, if it is decided to remedy that, is not to give you additional power to investigate, but power to enforce the resmt of the investigation ? Mr. Knapp. Yes; as is provided in the Townsend bUl. Mr. Adamson. Before we leave this question, I would like to ask: In any event, as to this provision you nave been talking about, you favor the conditioning clause under "substantially similar circum- stances and conditions," and whether in local traffic or foreign traffic? Mr. Knapp. If I understand you, that is what I would do. Mr. Adamson. Mr. Mann's amendment would abohsh that clause in all events. Mr. Washbuen. Referring to section 7 of the Townsend bill, in which common carriers are allowed to make agreements touching classifications of freight and so on, we had a witness here the other day, Mr. Pierce, I think, representing one of the railroads — I think the Chicago, Rock Island and Pacific — who stated to the committee that the detail work required under this section would make it almost unworkable. He said that the meetings between the railroads were of almost daily occurrence, and that the operation of this section would break down under its own weight, and he recommended that all of the section be stricken out after the word "unlawful" fine 2, page 13. I would like to inquire what your opinion would be as to that proposition, whether the detail work required under this section would make it unworkable, or need to make it unworkable. His contention was that the agreement would cover such a wide area and so many rates that it would make the mechanical work alone almost overwhelming, and that there would be a great duplication because 1224 BILLS AFFECTING INTERSTATE OOMMEBOE. almost substantially all of the information would, under the existing law, be in the possession of the commission. The Chairman. Well, if you will pardon me, his position was that they simply file an agreement to have the same rates, and that would not amount to anything, and if the agreement included the rates that would be a duplication of the tariff sheets. Mr. Knapp. I feel obliged to say that in all the discussions of this subject as to repealing or modifying the present section of the law, and the antitrust law as well, and providing for, in effect sanctioning, certain kinds of agreements between the railroads, this has been the first time it has been suggested to me that they could not file with us copies of their agreements after made. I have discussed this question with many railroad men many times, and I never heard that point made before, and it has been previously discussed before this committee. Mr. Townsend. You see no obstacle in the way of filing such an agreement as complies with the provision ? Mr. Knapp. I don't in the least. I don't appreciate the force of the objection. We provide now methods under which the duplica- tion of tariffs is very largely avoided. The Chairman. Here was the point that he made: They have an agreement and agree simply to make the same rate — the tariff sheet makers to make out the same rate, and that would not amount to anything unless it stated the rate, according to him — whereas if you inserted the rate in the agreement that would be a duplication of tariff sheets which would have to be filed ten days before the tariff sheet itself would have to be filed. Mr. Knapp. I would not say so. If they file a memorandum with us that they would have the same rates between certain points, the tariff would show what those rates are. Mr. Knowland. To quote Mr. Pierce's own words: If the railroads are authorized to make an agreement, and if they put the rates in and have the tariffs express the agreement just as fully and effectively as any other document that could be filed, where is the necessity of requiring the great burden to be imposed upon the railroad companies and the Interstate Commerce Commission of keeping superfluous documents? Mr. Stafford. He was there referring to the condition that only railroads be required to furnish statements of rates. There is no necessity of requiring the railroads to post their tariffs throughout the respective stations. Mr. Washburn. Eight on that point, I would like to ask Mr. Kjiapp if it would not reUeve the condition somewhat if after the word agreement" in line 3, page 13, we were to inse»t these words: "In such detail as the commission may require?" And that would leave it optional with the commission to vary the requirements in a way which would reUeve the railroads of any unnecessary duphca- tion. Do you see any advantage in that ? Mr. Knapp. I see no objection to that, Mr. Washburn. It might be well to give in that connection, if the provision should be adopted, some power to prescribe rules and regulations in relation to the matter. But I do think that the carrier should be required to file with the commission, and make a matter of record with the commis- sion, what they have agreed to do, but how they shall do it and how the work of doing it can be simplified is quite another thing. BILLS AFFECTING INTERSTATE COMMEECE. 1225 . Mr. Washbukn. That may be left to the commission to determine. Mr. Knapp. I see no reason why not, as they make tariff regula- tions now. Mr. TowNSEND. Do you think it advisable to cut out the remainder of that section? Mr. Knapp. That would license everything without making any record of it. Mr. Washbuen. But after the word "agreement" to put in "in such detail as the commission may require." Mr. TowNSEND. Very well. Mr. RiCHAEDSON. Don't you think there are enough regulations of railroads already to insure what you are intending to do, to make fair and reasonable rates; and wouldn't you think it very well in that connection and paragraph, to stop at the word "unlawful." Just simply say, that such an agreement is not unlawful, and stop there. And haven't you got all the precautions in the Hepburn bill, and the acts that came down from 1887, to give all kinds of publicity, and to give the people notice; and would not all this other matter being attached to it complicate matters,, and make it a tedious matter to find out what ought to be known ? Mr. Knapp. I have already stated that I think if railroads could be given this right, and I think they should be, they should be required to make a record with the commission of what they have agreed to. Mr. Eichaedson. That does it; make them, file it with the commission. Mr. Washbuen. I would like to ask you a question in regard to the creation of this interstate court of commerce covered by the first sijc sections of the bill. I understood you to express your approval, and the approval of the commission, in general terms. Am I to understand oy that that you meant that if we were to have a court of commerce you approved of its creation in this way, subject to the suggestion you made, or that you and the commission are in favor of the creation of the court as an independent proposition ? Mr. Knapp. I have presented the official statement of the com- mission on that subject. It would seem to me the clear inference from that statement would be that the conomission does favor such a court if created in the manner suggested by our memorandum. Mr. Washbuen. Then may I ask you to outline briefly the reasons which have led the commission to the conclusion that the creation of this court is desirable ? Mr. Knapp. In answer to your question I should like to be defi- nitely understood as giving expression only of my personal views. I regard the creation of a triounal of this sort as highly important. There are many reasons which bring me to that conclusion. The rather fundamental reason is grounded in the fact that these are all questions of national scope and interest. They are in no sense the local and isolated questions which arise in the ordinary courts. It is important that there be one tribunal of first instance which shall pass upon all these questions so that the determination will be har- monious and consistent, and not as it is now, uncertain and con- flicting in different parts of the country. Mr. RiCHAEDSON. In connection with your definition, which I am interested in, I understood you to state yesterday in your testimony 1226 BILLS AFFECTING INTEBSTATE COMMERCE. that this commerce court, in its chief and principal functions, should not be allowed and does not allow such court to exercise any greater authority than the present circuit court exercises over the orders and proceedings of the commission. Mr. Knapp. As to jurisdiction, that is right. In the second place, Mr. Washburn, you would get real expedition. Now this is what hap- pens. We have what is called the expediting law. The commission makes an order which the carriers are constrained to resist. They pre- pare and file a bill in which they ask for an injunction permanently staying that order. Then they make application for a temporary stay until the motion can be heard. Under the present law the Attorney-General may fUe a certificate which has the eiiect of requir- ing that at least three judges in that circuit in which the bill is filed shall get together and hear that case in the first instance. Now, they are eSI very busy men. Federal litigation is rapidly increasing throughout the country, and their calendars are crowded. The terms are fixed and the judges assigned to hold them in different parts of their circuits, and it is a very serious matter for judges and htigants if the judges must drop all of their business and leave the courts to which they are assigned, and get together to hear one of these cases. And delays are inevitable; they have occurred and will occur. It is not practicable to get three circuit judges together under ordinary con- ditions right off to hear one of these cases. They involve the examina- tion of extremely voluminous records; for example, it was told to me that Judge McPherson stated that he spent three months on the Mis- souri passenger rate case. In the next place, while, as respects orders which the commission now has authority to make, the need of such a court is considerably, perhaps materially, lessened by these recent decisions of the Supreme Court, still our experience shows, and I think that is to be the experience of the future, that the greater part of those cases will not turn upon questions of judgment and discre- tion, but upon construction of the law, the authority of the commis- sion, and surely not far away, the very great question of what is legal confiscation. I had a statement prepared by our solicitor, who is a very excellent lawyer and who has hved with this law for a great many years, which comes to about this: That out of 31 cases, the most of which were filed during th^ last year and a half, and a majority during the last year, seeking to restrain orders of the commission, 24 of them would not have been affected by these decisions of the Supreme Court, because they were based upon construction of the statutes or the contention that the commission exceeded its jurisdiction or authority, independent of the question of judgment and discretion. Mr. Stevens. To put it in another way: How many cases would come within the scope defined by these decisions of the Suprem* Court of the United States, and could not get into the court of com- merce under the provisions of this bill here ? Mr. Knapp. All together ? Mr. Stevens. This court of commerce has a certain jurisdiction. The decision of the Supreme Court in the Illinois Central case defines what jurisdiction courts have over orders of your commission. How many of that class of cases that this court would have jurisdiction of, that your orders could be assailed, would have been in the court or BILLS APFECTUiTG INTERSTATE COMMERCE. 1227 commerce if it had been in existence, since the passage of the Hepburn Act? Mr. Knapp. As I stated, I think some 31 or 32 bills have been filed restraining orders of the commission since the Hepburn Act was passed; but you will bear in mind that the commission made no very- important orders of large effect upon revenues of railroads for perhaps a year or a year and a half, and not many until two years or more after the Hepburn bill was passed, so that most of these cases have been brought during the last year and a half, and, I should say, the major- ity in the last year. Mr. Stevens. I notice in your report of 1908 a statement that, I think, 17 cases had been filed up to that time assailing the orders of the commission ? Mr. Knapp. That conforms to my statement. There are thirty- odd in all. Mr. Stevens. I have not examined the last report. Mr. Knapp. So that, as I said, about half were brought within the last year. Mr. Kennedy. There are some features in this bill which amplify your jurisdiction that might produce a great many more cases. Mr. Knapp. I was gomg to add: In the second place, there is a feature of this so-called Townsend bill which I certainly regard with great favor. That is section 12. I think it an admirable piece of constructive legislation. It contemplates that the question of whether the purchase of an interest in one railroad by another will be in violation of any existing law shall be adjudicated in advance and not after the event. I am very much in favor of that. Mr. KiCHARDSON. You are in favor of the general principle, not the details. Mr. Knapp. I don't care so much about the details. I do not hesitate to express myself as very much in favor of the legislation involving that plan. As Mr. Stevens says, I am not impljang the approval of every detail of this bill. It may be open to criticism and need amendment. Mr. Richardson. But the general principle you approve ? Mr. Knapp. Yes; that one section, or the enactment of a law involve ing that proposition, will give a large amount of work to the court of commerce. We read everj^ day about schemes by which one rail- road is acquiring an interest in another. It is well known that our railroad system has been built up by various forms of acquisition, and those who are interested particularly in financing such enter- prises will be sure to come to this court and have a determination so that they may know whether the thing they propose to do is lawful or not. If that court says it is unlawful, it is ended right there. If that ' court says it is a lawful thing to do, then it enters a decree to that effect, which would have the effect of estopping the Government thereafter from attacking it as in violation of the antitrust law or any other law. It is perfectly obvious that if that plan is adopted they will avail themselves of it, and that will furnish a very large amount of work for the court, and it is work of a kind that ought to be done by one court. It would be unfortunate, I think, for a scheme of acquisition to be f>resented to a judge of a court in California, say, and held to be unlaw- ul and permanently enjoined, and a similar scheme involving the 1228 BILLS AFFECTING INTERSTATE COMMEEOE. same principles presented to a court in New York and held to be all right, for then you would have conflicting and inharmonious rulings, and you would never have the matter settled until a series of cases were taken to the Supreme Court. In other words, there are a class of questions to be presented under this twelfth section which call for prompt determination and for determination by one single tribunal, so that they shall be harmonious and consistent. And more than that, the jurisdiction of that court should be enlarged, in my judg- ment. For example, suggestion has been made that suits brought in federal courts to restrain orders of state commissioners should be required to be brought in this court. Now, you have in both of these bills a more or less elaborate scheme for controlling or regulating the issue of railroad securities, and while that puts certain duties and powers upon the commission, as it properly should in that regard, manifestly that is a scheme of legislation which itself is going to give rise to a great many questions; and while no jurisdiction is now given under the Townsend bill over litigation of that kind, I think it is altogether probable that it will be, as questions develop as to what the commission can do, and whether it has acted within its authority, or exceeded its authority, or made an order which any interest can attack. So, very crudely, Mr. Washburn, I have indicated some of the fundamental reasons why I think that such a court is needed and would perform a very useful function in our judicial system. Mr. Washburn. I would like to ask two more questions. The first is whether, if it were not for the new duties created under this bDl, for the attention of this court, you would still think the creation of the commerce court desirable ? Mr. Knapp. Yes; I would myself. Mr. Washburn. And then this other question, touching upon the adverse comment of the commission as I understood it yesterday, upon the methods of constituting this court. Would you mind am- Elifying along those hues why you think some other method would e better ? Mr. Knapp. As my esteemed associate, Mr. Clements, said the other day before the Senate committee, when he was asked a similar question: "The ordinary way of constituting a court is to have the judges appointed by the President, and to give them a permanent official tenure." I do not know of any constitutional or logical reason why that could not be done by the Chief Justice as well as by the President, if it is to be done at all. But why a court that is to be made up by selection from the whole body of circuit judges, and which must be constantly changing in its personnel; what is the advantage of it ? Mr. Washburn. I haven't your testimony before me now; but is that your only objection to the constitution of the court as provided by this biU ? Mr. Knapp. What the commission suggested was that the court should be composed of judges appointed thereto by the President, and to remain permanently therein. Mr. Townsend. The new bill provides that the President shall name the first five, and they shall be together on that court; and that after 1914 then they shall not be eligible to redesignation to that court by the Chief Justice until they have been off one year. Mr. Knapp. That is a change which approaches toward the com- mission's proposed amendment. BILLS APPEOTING INTERSTATE COMMERCE. 1229 Mr. Washburn. I was interested in a more fundamental proposi- tion than that. I understand that under the bill this court is to be made up of judges now in the different circuits, who are to serve for a certain length of time. My interest rather lies in asking Mr. Knapp if he is of the opinion that judges who are permanently appointed to this court will be in a position to render perhaps more valuable service than those who should be appointed to it from the circuit court by reason of the fact that their attention would be, through their tenure, directed to this particular class of questions. Mr. Knapp. I think that question should be answered in the affirmative. Mr. TowNSEND. Would you have no objection to that provision, even with your suggestion carried out, of making their tenure for life on this court, and to give the Chief Justice power to assign them to a circuit in case they were not busy with the work here ? Mr. Knapp. No; if you are to retain the principle that this court, after it is first created, is to be made up by taking the judges from the body of circuit judges. Now, as I read your amended bill it means this: The President will appoint, by and with the advice and consent of the Senate, five additional circuit court judges, no two of whom shall be appointed from the same judicial circuit. Those five are to constitute the court of commerce, and the President will desig- nate which one of those will serve for one, for two, for three, for four, and for five years, and after 1914 no judge can be redesignated to that court until after he has been away from it a year. Mr. Richardson. Under the revised bill ? Mr. Knapp. Yes. This is the way it would work out: The Presi- dent appoints five judges, and they make this court. At the end of the first year the designation of one man has expired, and the Chief Justice of the United States could name his successor. He could take that man, because it is before 1914, but he is not bound to take him; and he could take any circuit judge in the United States and put him on that court, and so with the next year; that is, after the court is first created, any addition to that court to take the place of a man who died or resigned, or whose first designation expired, would be from the whole body of circuit court judges, and the vacancy would not be filled thereafter by appointment by the President and confirmation of the Senate with a view to serving in that court, but the vacancy would be filled by the Chief Justice, who would have the power to select any circuit court judge from any part of the United States and put him on that court. Mr. Washburn. In a word, you believe it would be better to have an independent court, the judges of which should for tenure be con- fined to the construction of this class of cases alone ? Mr. Knapp. Yes ; although I do favor a provision in the Townsend bill which says that if there is not work enough to keep these judges busy Mr. Washburn. That is another matter. Mr. Knapp. I would have the court a permanent one in its per- sonnel. I would have judges appointed to that court by the Presi- dent. Under the bill, while the court, as such, would have only this limited and exclusive jurisdiction, the judges of that court would be full circuit court ju4ges, and would be eligible to do circuit court work in any circuit in the United States; ana if there was not business 1230 BILLS AFFECTING INTEESTATE COMMBKCE. enough in this court to occupy their time, then any one or more of them could be assigned to duty wherever there was need of temporary judicial assistance. Mr. Washburn. Is it your opinion that there would be business enough for this new court to keep it busy ? Mr. Knapp. I think so; yes. Mr. Stevens. I would like to ask a question which approaches, fundamentally, the same lines. As I understand, from the decision of the Supreme Court in those cases defining your jurisdiction, and from the language of the reports of your commission, the orders of your commission can be assailed in two great classes of cases, the question of constitutionality and the question of jurisdiction Now, where a rate has been made by the railroads, and contested before your commission, and your commission sets the rate aside and fixes a rate which it judges to be just and reasonable, according to circumstances, can that rate be assailed in this court of commerce as being beyond your jurisdiction on the ground that it was unreasonable, unjust, or unjustly discriminatory ? Mr. Knapp. I think not. Mr. Stevens. So that the whole question of considering the ques- tions of unreasonableness, injustice, or unjustly discriminatory rates lies with your commission? Mr. Knapp. I think that is exactly what the paragraph means to say, as put in this memorandum. If the commission makes an order involving the exercise of judgment and discretion, that order is not open to review by the courts unless the commission has pro- ceeded without authority or has invaded constitutional rights — they don't say it in that explicit 'fashion, but I don't see how any other inference can be drawn from what they said. Mr. Stevens. I don't either. But I wanted to make it clear that the question of unreasonableness or injustice of a rate is not a ground of jurisdictional questioning of the orders of your commission. Mr. Knapp. Unless it becomes confiscatory. Mr. Stevens. If that be true, what is the necessity of long records or long hearings before a court of commerce in considermg your orders? Isn't it a short proposition then? Mr. Knapp. It would be, I think, Mr. Stevens. Mr. Stevens. That is why I wanted that to appear of record. Mr. Knapp. It would be, excepting where the constitutional ques- tion is involved. Mr. TowNSEND. And that is involved in all of them. Mr. Knapp. Oh, no. If it is a mere question of jurisdiction, which amounts to the same thing — the question of whether the commission has correctly interpreted the statute — because the com- mission must construe the law in applying it, and the correctness of its construction may be questioned, that presents a pure question of law. Mr. Stevens. "Which does not require any great length of time ? Mr. Knapp. No; so that the questions involving the meaning of this law, its proper construction and the jurisdiction of the commis- sion, would not require a long time, and could be promptly deter- mined. But when you come to the question of whether the order operates with confiscatory effect, you have a vefy large question of fact to deal with. BILLS AFFECTING INTERSTATE COMMBBOE. 1231 Mr. Stevens. Now you deal with a question of fact. Do you think that five judges drawn from five circuits as they happen to be located could deal with a question of fact to better advantage than a limited number of judges of equal ability and long experience from the locality itself ? Do you not think that the judges from the locality itself could get at the question of fact to better and fairer advantage than those from a distance schooled in a place like Washington ? Mr. Knapp. But that is a matter of opinion. It might be so in one case and it might not be so in another. There is no sort of objection — the President is not limited in his selection of judges for this court. He may appoint men who are now on the bench, and thereby, of course, create a vacancy in the court where they now serve. Mr. Stevens. You realize that if a circuit judge now be taken from his circuit work his place could be immediately filled by the appoint- ment of a district judge to do that same work ? Mr. Knapp. I suppose that is the case. Mr. Stevens. Certainly, and we have a superfluity of district judges and many of them do not do enough work to hardly earn their salt. We realize that. Mr. Knapp. I do not reaHze that; I don't know about it. Mr. Stevens. I can tell you that that is the fact. Mr. Knapp. It is not true in the districts with which I have some famiharity. Mr. Stevens. I can tell you that there are a great many dis- tricts Mr. Knapp. Perhaps we misunderstand each other. I rather assumed that in many of the districts, so far as the work of the dis- trict court is concerned, it would not occupy all the time of the dis- trict judge, and that the district judge finds his principal work in the fact that he holds a circuit court. Mr. Stevens. Now, the circuit and district work in a great many of the districts of the United States does not require a considerable part of the time of the judge of that circuit, and I can name a great many of them, if it was necessary, and quite a number in our section. Mr. Knapp. I was not aware of that. Mr. Stevens. In a section such as the Dakotas, and in districts like Wyoming, and the small districts like that, their judges are assigned to other circuits, as a matter of course. It has been done a great many times, and I will venture that at this moment many of them are so assigned. Mr. TowNSEND. One circuit judge assigned another's work? Mr. Stevens. No; a district judge assigned to work in another district. Judge Amidon does most of his work in the same circuit, but in a different district. Mr. Knapp. The second circuit is composed of the States of Ver- mont, Connecticut, and New York. The district judge of the dis- trict of Vermont probably does more work in New York City than he does in his own State. Mr. Stevens. That is the point. We have so many district judges now that the work of the country is fairly well done in the circuit courts by reason of the district judges doing circuit work. Now, what is the reason the circuit judges could not do the work performed by this commission, and obviate the necessity of having an increased 1232 BILLS AFFECTING INTEKSTATB COMMEBOE. number of circuit judges when we have a superfluity of district judges and their work can be interchanged ? Mr. Knapp. You are assuming that there are many superfluous judges. Mr. Stevens. I think it is the fact. Mr. Knapp. I see you have created another one in the district of Maryland. Mj. Stevens. We did; and two in Ohio. Mr. Kennedy. And we needed them in Ohio. Mr. Stevens. We could lend you some. Mr. Knapp. I am assuming, and it must be the case, that the federal litigation is rapidly increasing. The commerce clause of the Constitution, as it is interpreted by the courts, is the most tremen- dously centralizing force in our political system. Mr. TowNSEND. There is another provision of section 5 rather in •connection with this, which under the new bill provides that the Department of Justice shall have charge of cases which are now prose- cuted independently by the commission; and in that section it pro- vides that the Attorney-General, who has charge of the care of those cases, may employ counsel anywhere to assist him. Mr. Cowan was before this committee, or sent a brief, in which he contends very vigorously for the right of the shipper to appear before this court and before the Supreme Court to make arguments and file briefs, insisting that that is a right which is very dear to the shipper. What have you to say as to whether we ought to insert in the law such a provision ? Mr. Knapp. The commission has not suggested any change in that regard. Mr. TowNSEND. I recognize that. Mr. Knapp. And I think it may be assumed, because it seems to me to be a necessary inference, that the commission is in favor of this bill, except as it recommends some changes which I have brought to the attention of the committee. The bill, as I understand it, contemplates that the Attorney-General may employ special counsel in cases. It is provided so in terms. Isn't it almost inevitable that the Attorney-General would employ the counsel who had appeared before the commission for the complainant, and the man who had made himself familiar with that case ? Mr. Richardson. But, Judge, this bill forbids the attorney of the commission, who is familiar with the case, from appearing in the court of commerce or the Supreme Court. Mr. TowNSEND. Oh, no. Mr. Knapp. We are not speaking of the commission's attorney, Mr. Richardson, but the attorney who represents the complainant before the commission. The bill would not prevent the Attorney- General from employing Mr. Cowan in any case in which he had rep- resented the complainant before the commission. Mr. TowNSEND. Can you see any objection to a law compelling the Attorney-General to employ any counsel who comes up here with the shipper ? Mr. Knapp. Yes, I can see objection to a law that compels the Attorney-General to employ counsel and pay them when he don't think it is necessary. BILLS APFEOTING INTERSTATE COMMEBCE. 1233 Mr. TowNSEND. Or permit them to take part in the conduct of cases. . Mr. Knapp. Looking at that side of it for a moment, would not the court on application be almost certain to allow the parties directly interested to present their views ? Suppose this court of commerce or the Supreme Court were hearing a case in which the complainant had been represented before the commission by outside counsel. They want to be heard in that case. The court has got unquestioned power to permit it. Mr. Kennedy. They generally do permit parties interested in that way. Mr. Knapp. I suppose it is a common practice. Mr. Kennedy. I have never known it to be refused unless specially interested. Mr. Knapp. And particularly where the Government directly or indirectly is one of the parties to the litigation, and has no direct interest in the decisions. I supposed it was a very common thing to allow the parties who were in interest to appear. You gentlemen can judge as well as I can whether there is any need of amending the law in that regard. You can judge as well as I can whether you shoxild put in the law a provision which in effect compels a court to hear counsel when they don't think there is any need of it, and do not want to. Mr. Townsend. That is the way I look at it. Mr. Knapp. To compel a court to listen to any lawyer who comes there and says "I want to be heard in the interest of So-and-so." Mr. Townsend. I presume no Attorney-General would take the chance of turning down a man who has successfully conducted a case. Mr. Knapp. As I said, we have to trust somebody. You can not fix it all by the statute, so that nobody is going to have any judgment or discretion. You must trust somebody. Mr. Stevens. I have a question that has not yet been raised, and is not in the bill. In section 1 of the original interstate-commerce act, which I hand to you, there is the proviso which I read. [Reads.] Provided, however, That the provisions of this act shall not apply to the transportation of passengers or property, or to the receiving, delivering, storage, or handling of property wholly within one State, and not shipped to or from a foreign country from or to any State or Territory as aforesaid. Mr. Knapp. I should be glad to see that eliminated from the law. Mr. Stevens. Do you think there would be any danger to the law in doing that ? Mr. Knapp. Absolutely none. Mr. Stevens. Do you think it would be of some assistance to the commission and courts in determiniug questions of interstate char- acter ? Mr. Knapp. Very likely of some assistance to the commission. To take it out would remove a limitation which might otherwise be claimed to be binding on the courts themselves. Mr. Stevens. Questions hke demurrage, switching charges, and so forth ? Mr. Knapp. Oh, yes ; and whether the railroad is engaged in inter- state commerce, etc. Mr. Kennedy. It is an instrument of interstate commerce whether so engaged at tha time or not. 1234 BILLS AFFECTING INTEESTATE COMMERCE. Mr. Knapp. I should like to see it go out very much. Mr. Stafford. On the question of compelling the railroads to furnish a through rate upon application of a shipper, I would like to ask whether there is any necessity, if we establish that requirement, of compelling the railroads to file their tariffs with their respective station agents along the line? Mr. Knapp. They have to do it now. Mr. Stafford. It was represented here by the general counsel of the Rock Island system that if we make it mandatory upon the rail- roads to furnish the rate in advance there is no necessity of compelling them to post the tariffs at the respective stations. Mr. Knapp. I can not agree with that at all. The shipper should be at liberty to rely upon the posted tariff and not have to ask an agent. Mr. Stafford. And not upon the ipse dixit rate furnished the shipper. Then, again, it was claimed by one of the witnesses that the same requirement, of furnishing a rate from railroad carriers, should be extended to express companies; that there is difficulty by the shippers generally in obtaining rates from express companies, and that they do not know in advance what a rate may be to some point on a line other than their own. Have you any comments to make upon that subject? Mr. Knapp. I see no objection to that. Mr. Stafford. Though it may not be included in either of these bUls, I would like to ask whether the ' commission has passed upon the reasonableness of express charges by express companies in cases brought before it ? Mr. Knapp. Oh, in a number of cases. Mr. Stafford. Does the commission in those cases pass upon the reasonableness, and if the rat$ is found to be unreasonable, order in effect a lower rate ? Mr. Knapp. It has done so in a number of cases. Mr. Stafford. Have there been many petitions brought to the attention of the commission charging that the express charges were unreasonable and exorbitant ? Mr. Knapp. If you mean by that specific instances, I should say not relatively large. There is a more or less feeling throughout the country, as disclosed by letters that we get and by what we read in newspapers, and in other, ways, that express rates generally are very Mr. Stafford. Has there been since your service on the commis- sion, or from your acquaintance with this subject, any general reduc- tion in the rates charged by express companies ? Mr. Knapp. I am not able to say. It is only under the Hepburn law that we have jurisdiction of express rates. I have been told that when we took up this matter of tariffs, which the express com- panies should file and post when we thought it was necessary to have some different regulations in respect to the express tariffs than those which apply to railroad tariffs, there was a pretty general revision of the express tariffs; and I have been told tnat that worked out a great many reductions, particularly where a package moved over the routes of more than one express company. Mr. Stafford. It has been testified to here that the express com- panies are becoming fewer, and that certain ones are absorbing the BILLS AFFECTING INTERSTATE COMMEKOE. 1235 former companies. My attention was directed to the first case decided by the commission back in 1887, that at that time the pro- portion of charges that the railroads received for their share of this trafl&c was 40 per cent. But in the hearings that have been held on these bills it seems that the ratio has increased until the general per- centage is 55 per cent. Can you say what is the reason why the rail- roads are exacting a larger percentage of gross receipts of the express conipanies than when there was more competition back in 1887 ? Mr. Knapp. I can not; I didn't know tnat it was a fact. I did not know what change had taken place in twenty or twenty-five years between the share which the railroad gets out of the express business then and now. I have never had any occasion to look into it. I knew in a general way that it averages at about 55 per cent now. Mr. Stafford. In the decision by Commissioner Walker at that time, in 1887, he stated that the average percentage was 40 per cent, and I assume that he had some data on which to found that. Mr. Knapp. But I can understand that this business has developed. When it was small the express companies had to have 60 per cent of it in order to warrant maintaining express service, but as the country grew and business multiplied the railroads received larger proportions. Mr. Stafford. Some members of the committee who are not present wished to interrogate you about the long and short haul clause, to ascertain definitely just what position you take in regard to it, your reference to Judge Adamson's question creating somewhat of a doubt. As I understand you, you are not favorable to the pro- vision carried in the Mann bill compelling the railroad carriers not to charge more for the short haul than the long haul; and you believe that by reason of the geographical conditions that there must nec- essarily be some differentials charged, and that the commission should have some discretion in determining what the minimum rate should be. . Mr. Knapp. The commission would not favor a hard and fast rule. It would not prohibit in every case a higher charge for the shorter distance; but, on the other hand, the situation we are in now is this: If the unusual conditions at the longer distance point are still there, then the fourth section does not apply at all; so that the fourth sec- tion is practically a dead letter. Mr. Stafford. What change would you make in export rates in contradistinction to import rates? I do not know whether you brought that out. I followed you very closely as to your views on import but not on export traffic. I believe you said they could be distinguished. Mr. Knapp. That is an economic question, of course, and goes to a question of public policy. I have only that opinion which a fairly intelligent man might be supposed to have. It does not involve any question relating to the present law or any law that is now pending; but I mean this: We have a country of great extent, of limitless resources, with a most energetic and enterprising people; we have highly organized and efficient machinery for production, which means, or ought to mean, I think, that for some time to come we should produce more in the United States than will be consumed in the United States, and it is to our interest, therefore, to reach the markets in foreign countries. So I have less diificulty in assenting to a low rate on export as compared with the domestic rate to the same port 1236 BILLS AFFECTING INTERSTATE COMMERCE. than I have to a very low import rate as compared with the domestic rate from the same port. Mr. Kennedy. It would not do any harm, Judge, if the commis- sion were clothed with the discretionary power to fix even a minimum rate on exports. They would not exercise that discretion to hurt our people, would they? Mr. Knapp. They would not mean to do so. Mr. Kennedy. I have thought that to prevent the putting on of an export duty at a time like the present would prevent the taking of considerable foodstuffs abroad, and that might be in the line of the best public interest. Mr. Stafford. Is there any provision preventing an export duty? Mr. Knapp. I think not. I think the only prohibition is on the States ? Mr. Townsend. To my knowledge, most of the intelligent modem nations encourage exports to their utmost ability instead of trying to discourage them. Mr. Knapp. Yes; the German Government has gone to surprising lengths, owning or controlling railroads, in making rates on export traffic there very low, very low, in comparison with their domestic rates. Mr. Townsend. And France does the same thing. Mr. Knapp. Yes. Mr. Townsend. And Belgium. Mr. Knapp. Yes; but Germany is the most notable example. Mr. Townsend. So that instead of putting any possible restriction on the increase of foreign trade with other competing nations, they try to increase it in every possible way ? Mr. Knapp. Yes. You nave expressed better than I did my thought as to its economic effect and the public policy involved as between the export and import situation. The Chairman. And the favoritism shown by those foreign coim- tries is shown toward exports ? Mr. Knapp. Exports. Mr. Richardson. I was anxious before the latter part of the exami- nation to which you were subiected to ask you some questions in con- nection with the proposed commerce court — not the composition of it or the mode tmd manner of its formation. Please omit all that. I want to ask you about the necessity of a commerce court, so far as the public good and the full and complete beneficial effects are concerned, or in connection with rates and regulations relating to the transpor- tation laws of the country. That is the line I want to talk to you on. Mr. Knapp. Well, Mr. Richardson Mr. Richardson. You have given your opinion very freely about the different features of this commerce court, and I know you will give it to me on that subject. That is the guide to the whole thing, whether or not the necessity exists for this court, elaborate as it is in its provisions. Now, in the first place, I call your attention to this [reading from the administration bill]: And eucli Assistant Attorney-General and attorneys shall have charge, under the Attorney-General's supervision and control, of the interests of the Government in all cases and proceedings in the court of commerce and in the Supreme Court of the United States upon appeal from the court of commerce. The Interstate Commerce- Commission and its attorneys shall take no part in the conduct of any such litigation. BILLS APFEOTING INTERSTATE COMMEBOE. 1237 That is the attorney of the Interstate Commerce Commission ac- cording to this bill. Is he not a trained man in his profession at law, competent and qualified ? I take that for granted. Is there any rea- son or good reason for keeping him, with his knowledge and experi- ence, familiar with a case that comes from the Interstate Commerce Commission to the court of appeals or the Supreme Court, from ap- pearing in that court and giving the court the advantage of his knowl- edge and information ? 1 call your attention to that one feature of the law singly and independently. Mr. Knapp. Well, the appeal in that respect is framed on the theory that when the commission has concluded its investigations of a given case or complaint and has made an order its function is ended. Mr. Richardson. I understand that about the commission, and — — Mr. Knapp. And it is not, therefore, for the commission to go into court and defend its own action. Mr. Richardson. My dear sir, I did not dream of that. Mr. Knapp. I said that is the theory of this bUl. Mr. Richardson. I excluded the commission from it. I do not think the commission ought to do that; but is there any reason, as a matter of propriety, why the attorney who studied the case for the Interstate Commerce Commission should be prohibited from going before the court of 'commerce or the Supreme Court to aid and help other attorneys or the Attorney-General in a proper communication of the facts bearing on that case ? Mr. Knapp. Personally, I see no objection to that. Mr. Richardson. Would you not think it very advisable for such a man to be there 1 Mr. Knapp. That might be so, too. Mr. Richardson. According to what you have been expressing about trained judges this morning, that man is competent and qualified ? Mr. Knapp. Speaking for myself, I would prefer to see that sen- tence stricken out of the bill, so that the Attorney-General would be at liberty, if he desired or thought best to do so, to have associated with him, either before the court of commerce or in the Supreme Court, an attorney of the commission. Mr. Richardson. From your observation, is it not a fact that in the States where district attorneys prosecute cases, or have charge of them, and they are carried to the supreme court of the State, the attorney-general not only welcomes but invites that district attor- ney to come up to the supreme court and help him ? Mr. Knapp. I do not know what the practice is. Mr. Richardson. But that is good common sense 1 Mr. Knapp. In the State with which I am familiar the district attorney takes it up, as a matter of course. Mr. Richardson. Now, in describing and indicating the subject- matter of jurisdiction of this commerce court this revised and re- formed bill of "the administration" says this (reading from the bUl): But nothing herein contained shall be construed aa enlarging the juriBdiction now goBSBBBed by the circuit courts of the United States or the judges thereof which is ereby transferred to and vested in the court of commerce. 23738— FT 21—10- 1238 BILLS AFFECTING INTBKSTATE COMMERCE. Now, as I understand that, this court of commerce exercises alone the jurisdiction that the circuit courts now have over the orders and proceedings of the Interstate Commerce Commission ? Mr. Knapp. Yes. Mr. Richardson. Then wherein and how can there be such great benefit in the court of commerce, so far as public interests are con- cerned, when that court is clothed with exactly the same jurisdiction that the circuit judges now exercise over the Interstate Commerce Commission orders ? Mr. Knapp. Expedition and uniformity. Mr. Richardson. Expedition is all it means, then, virtually ? Mr. Knapp. No; uniformitj^. We have already had the experience of one circuit court construing a law one way and another circuit court construing it another way, and we do not know what it is until the Supreme Court decides that question. Mr. Richardson. Well, you are going to get several men, a set of judges, that will confer with each other, and the jurisdiction of other judges is, of course, excluded, and you get uniformity of decision and expedition. Is that all? Supreme Court makes uniformity of decisions. Mr. Knapp. Yes, sir. You get another thing. I will put it this way: The laws which fix the political rights of the citizen may be different in different States, without any great trouble, and perhaps to advantage; as, for example, when a man becomes of age, the quali- fications of a voter, whether offices shall be filled by appointment or election; generally speaking, all those laws which fix the political rights and relations of the citizen may be different in different States, without objection and perhaps to advantage. So, too, the laws relating to property, to contract relations, and the devolution of prop- erty upon death, may be different in different States, without great difficulty and perhaps to advantage; as, for instance, rates of interest and a thousand and one things. But when you come into this court of commerce the state line disappears and the individual interest, which is always paramount in ordinary litigation, disappears. It is a question not only of public interest, but of unlimited public interest. It is in every sense a national question. That is my fundamental reason for favoring a national court to pass upon it. Mr. Richardson. As I understand it, this commerce court has a right to meet anywhere outside of Washington, according to the interests of the public ? Mr. Knapp. Yes, sir; it might sit in New Orleans or San Fmncisco, or Mr. Richardson. Suppose this commerce court were to meet in the State of Massachusetts; it would adopt or be governed by the same practice and rules governing the circuit courts of the United States holding their sessions in different States; that is, the circuit court complies with the laws of the State, as nearly as it can, not incompatible with the statutes of the United States ? Mr. Knapp. I believe that is the rule. Mr. Richardson. That same rule would be applied to this court of commerce if it should hold one of its sessions in the State of Massa- chusetts or any other State in the Union. Mr. Knapp. Assuming that that is so. BIL-LS AFFECTING INTERSTATE COMMERCE. 1239 Mr. Richardson. Then, all that we can get out of this creation of different attorneys and assistant attorneys, so far as the public good is concerned, is the uniformity of law and expedition ? Mr. Knapp. Yes; and you avoid putting a great burden upon federal courts, which, in some instances, I know they regard as intolerable. The Chairman. The committee is very much obliged to you. STATEMENT OF HON. EDWARD 1. TAYLOR, JR., A REPRESENT- ATIVE FROM THE STATE OF OHIO. Mr. Taylor. Mr. Chairman and gentlemen of the committee, I recognize that you are very busy, and if I did not think that the seemingly little matter about which I appear before you was important, indeed, for your consideration, I would not, of course, take up your time. I have introduced House bill No. 3084. It is simply an amend- ment; in fact, there is one word, possibly two words, changed in paragraph 4 of section 1 of the rate bill. The word proposed is on the third page, line 17 The Chairman. What is the word ? Mr. Taylor. The word is "died." It is changing the paragraph of the rate bill as amended last year. Mr. Adamson. Which paragraph ? Mr. Taylor. Paragraph 4 of section 1, the paragraph affecting free transportation, and changing the language as amended last year to not only include families of employees "killed" in the service, but families of employees who "died" in the service. When the bill was first passed that was entirely overlooked. For many years the railroad companies — and I know this from men pi-ominent in railroad circles — had always made it a custom, in f roper and meritorious cases where an old and faithful employee ad died to extend the pass privilege to his family. Mr. Bartlett. Indefinitely ? Mr. Taylor. Whenever they felt like it. There is, of course, nothing that compels them to do it. But in meritorious cases and when 9ie railroad desired to extend the privilege and the families wanted to get it. At present this is prevented by law and is made a criminal act. Mr. Bartlett. You misunderstood my question. Do you mean at any time ? Mr. Taylor. Oh, yes; at any time that they wanted it. Of course, at that time there was no restriction upon passes at all; they got as many as they wanted. The first time the matter was called to my attention was just after Congress adjourned and the Hepburn bill had become a law. Mr. E,. E. McCarty, general superintendent of the Pennsylvania Railroad lines, with headquarters at Columbus, Ohio, my home city, came to me very much worried about what he claimed was a thing affecting the esprit de corps of his immediate organization. He said that he found himself face to face with a number of requests of people who stood very high among the membership of the various railroad orders and who had formerly received transportation because they were 1240 BILLS AFFECTING INTERSTATE COMMERCE. widows or children of men who had been of long service with the rail- road ; but he found himself unable to accommodate them, and there was therefore some feeling being engendered. I investigated that matter and found that it was true, and quite a number of men, various trainmen of the various orders, called upon me at my office, assurinjg me that both the company and the employees felt that this senti- mental courtesy should be continued, and that it should not be stopped. The Chairman. The language of the present act is " also the fami- lies of persons killed." Mr. Taylor. I change it to "died." The Chairman. Now, what is the change you propose ? Mr. Taylor. To take out the word "killed" and put in the word "died," so that it will include the families of employees who died in the service. The Chairman. But of course that is not all. You would make it read, "also the families of persons who died while in the service?" Mr. Taylor. That seems to be the language — yes, "who died while in the service." The Chairman. Then it is not sufficient to strike out the word "killed" and insert the word "died." You leave in the word "killed?" Mr. Taylor. I didn't leave it in, but I am perfectly willing to put it in. The Chairman. It should read, then, ' ' also the families of persons who died," and so forth. Mr. Taylor. A year or two ago, as the result of this agitation, there came from the Senate an amendment, offered by Senator Clapp, and that amendment, instead of using general terms and taking m the families of all deceased employees who died in the service, simply provided that families of employees who were killed in the service might receive the courtesy of a pass, and that is the language the chairman has just read; in other words, it brought in a certain class of families of deceased employees, and not all of them generally. By this language, if I am correct in my language, I seek to simply gener- alize the families of deceased employees who died in the service and give the companies the right, if they care to extend the pass privilege, to grant such passes. The Chairman. Has there been any construction of the law as to the family of a dead person ? Mr. Taylor. I would not have any trouble in ascertaining that. The Chairman. What would you say was the definition? Mr. Taylor. His wife, his widow, if she survived him, and any children that might survive. The Chairman. Until, they got to be 80 years of age ? Mr. Taylor. It makes no difference if the railroad company cared to extend the privilege under those circumstances. This is not a mandatory rule; we are not forcing something upon the railroads. The Chairman. But a child 80 years old would be a member of the family. Mr. Taylor. Yes; I should say he was. Mr. Adamson. Dependent relatives, living in the family. BILLS AFFECTING INTERSTATE COMMEBCB. 1241 Mr. Taylor. Yes, sir; I would possibly consider my brother a member of my immediate family, if he lived with me and if I were supporting him. Mr. Richardson. And if he died, his children would become members of the family, and that of course would make it indefinite. Mr. Taylor. I know that it does not, excepting aa to the fact that the railroad companies may offer this to the family of a man as a courtesy, but a railroad may say that they will not issue it at all. Mr. Stevens. Wasn't it that very thing that the antipass law was enacted for, to stop the courtesy business? Mr. Taylor. No; I don't think so. There were very many serious objections to the antipass law, but I would not attempt to give them in detail. No one ever claimed that it was unwise to give a wife or widow of a deceased employee of a railroad, a man of faithful service and long standing, a pass to ride to and from her home; to go upon Memorial Day to put flowers upon his grave, or something of that kind. And I want to gay that there is a deep underlying senti- ment among the men that this courtesy ought to be extended, and it is also sought by the managements of the roads. Mr. Stevens. You realize that we are enacting a law for the government of a pubhc corporation performing pubUc functions for the benefit of the public; and when we make a general law preventing discrimination as to all classes of the public, in what way should this class of the pubHc have a favor given them, and discriminate against other classes of the pubhc ? That is the point that comes to us. Mr. Taylor. It is part and parcel of the railroad man's every day life, and that which he appreciates and expects during his liie, or during the term of his employment, to receive from the railroad company for which he is working, for himself and his family, free transportation at certain intervals. That same feeling always remams with the immediate family of that man after he has severed his connection by reason of death. It is because of that feeling that they have a right to a pass if they want to take a trip every once in a wmle. It has been the custom of years, and the esprit de corps of the railway organization demands it, on the part or the company. It is not the immediate family that is worrying the company, but the men who are still living and working for the company, feehng that the widow or the children of some man that they all knew, and who has died, ought to have this courtesy. As I have stated, it is purely a sentimental consideration and is not a question of logic. I have read this pass amendment, and if you can show me much logic in any of it I would be very glad indeed to see it. Mr. Kennedy. I think your amendment ought to be made ; that is, I think if we allow the word "killed" to remain, it follows, to me, that a man who has conducted the service of the company successfully without accident ought to stand higher than a man who is killed. But here is a suggestion that I think ought to be made, or a limitation that ought to be made, so that a son, say, of a railroad man, if he might happen to be a traveling man, could not Mr. TowNSEND. Or a Member of Congress. Mr. Kennedy. No; but if he was engaged in commerce, it would be tremendously advantageous if he should have a pass. Mr. Taylor. I do not object to any limitation, but at the same time I did not consider it. 1242 BILLS AFFECTING INTERSTATE COMMBECE. Mr. Sims. It might be made to cover the widow during widowhood, and the children during minority. Mr. Taylor. That would suit me exactly. Mr. Adamson. You spoke of this relieving the officials of embar- rassment. Don't you think that it would relieve them of great embarrassment and enable them to reduce passenger fares to the entire public if we were to repeal all of these exceptions to that anti- pass provision ? Mr. Taylor. No; I do not agree with you at all upon that. I am very much obliged to you. (Thereupon, at 1.10 p. m. t^e committee adjourned until Monday, February 21, 1910, at 10 o'clock a. m.) HEARINGS BEFORE THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE OF THE HOUSE OF REPRESENTATIVES ON BILLS AFFEOTINO INTERSTATE COMMERCE Part XXII WASHINGTON GOVERNMENT PRINTING OFFICE 1910 COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, HOUSE OF REPRESENTATIVES. JAMBS R. MANN, IKVINO P. WANGEK, PENNSTtVANIA. FREDERICK C. STEVENS, Mdjhesota. JonN J. ESCH, Wisconsin. CHARLES E. TOWNSEND, MiCHiQAN. JAMES KENNEDY, Ohio. JOSEPH R. KNOWLAND, California. WILLIAM P. HUBBARD, WEST VntQINU. JAMES M. MILLER, Kansas. WILLIAM H. STAFFORD, Wisconsin. Illinois, Chairman, WILLIAM M. CALDER, New Yobk. CHARLES 0. WASHBURN, Massachvsbtii, WILLIAM C. ADAMSON, GeoeGIA. WILLIAM RICHARDSON, Alabama. CHARLES L. BARTLETT, Geoboia. GORDON RUSSELL, TEXAS. THETUS W. SIMS, TENNESSEE. ANDREW J. PETERS, MASSACHUSEm. II BILLS AFFECTING INTERSTATE COMMERCE. Committee on Interstate and Foreign Commerce, Monday, February 21, 1910. The committee this day met at 10 a. m., Hon. James E. Mann (chairman) presiding. The Chairman. There may be introduced into the record a letter from Mr. S. H. Cowan, representing the Cattle Eaisers' Association of Texas. (Following is the letter referred to :) [Cattle Raisers' Association of Texas.] Fort Woeth, Tex., February 17, 1910. Hon. James R. Mann, Chairman Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. Deab Sie : I hesitate to further tax your time and patience, but at the risk of doing so write these suggestions to each member of your committee, because I feel that no member of the committee desires to do anything which will work, or may work. Injustice to shippers or railroads. That part of the Townsend bill which declares that " the Interstate Commerce Commission and its attorneys shall take no part in the conduct of any such litigation " will probably work so unjustly In the cattle rate case which I cited in my argument filed with the committee, and probably in other cases, that I feel it my duty to point it out. That case is pending before the master in chan- cery at St. Louis ; the evidence, briefs, and arguments are all in ; and it is expected that he will make a report to the United States circuit court any time. ' I am acting as special attorney, employed by the commission in the case and under appointment of the Attorney-General, and Mr. P. J. Farrell, an attorney regularly in the employ of the commission, is with me in the case, and he like- wise has an appointment from the Attorney-General. I have spent more than a full year's time altogether on the case before the commission and the court. It covers a great field of detail, and can not be decided properly without con- sidering the facts in detail. It is not egotism to say that no other lawyer knows the case, nor is it a criticism to say that no other lawyer can familiarize himself with it so as to properly handle it in less than three months. If you doubt that, please send for Mr. Farrell, who is in the commission's ofHce, and get him to tell you about it. Now, when the master makes his report the case will come on for a hearing on objections to tlie master's report before at least three of the circuit judges holding the circuit court. Suppose this bill becomes a law during the pendency of the case. This clause to which I object, it seems to me, prohibits the Attorney-General from employ- ing either one of us as special attorney in the case, and probably prevents either of us from appearing. The Attorney-General must construe it to be the policy of the law to prohibit him from employing any attorney who has repre- sented the commission in the case. The Cattle Shippers and the Cattle Raisers' 1243 1244 BIliLS APFECTING INTBKSTATE COMMEKUJS. Association, complamant, which has spent many thoufiands of dollars in the case before the commission, have no right to appear by counsel and thus, right in the middle of this important case, involving already, according to the allega- tion of the railroads, $2,000,000, and as a precedent involving ultimately five times that amount — as I can fairly demonstrate — it is proposed in this bill to exclude me and my clients from this case. In the name of even-handed justice for the shippers of this country and as well for the bar, I want to register this protest against that which, as I Interpret it, would prohibit my going on with the ease in -the circuit court or the Supreme Court, and prohibit attorneys of the Interstate Commerce Commission familiar with a given case from being retained or to appear. And I wish in the same behalf to enter the earnest plea that the shippers who were complainants before the commission shall have the right to appear by counsel in any court in any case where the order of the commission is attacked, in support of the order, under such rules as the court may prescribe. I know a certain case where certain parties having rights, as they conceive, by contract will attempt to enjoin the railroads from obeying the commission's order if made. I know of other shippers equally interested on the other side. Shall they not be accorded the right to be represented? There can be no fear that such appearance will prevent the Attorney-General having control of the case, as the court can prescribe the rules to suit the case, as its conduct is necessary ; but the bill can be made to read that the Attorney-General shall have control and direct the case, ami that will meet the objection that he would be interfered with. I notice the expression by some of the committee in report of hearings that they can not conceive that in such a case as the cattle-rate case the Attorney- General would not retain the counsel familiar with it. Why, then, should the bill expressly exclude the commission's attorneys? After having provided in the bill fhat the Attorney-General shall have charge and control, what effect can the clause to which I object have unless that which I have pointed^ out? I trust you will not consider what I now say, or have said, a criticism of the authors of the bill or of the Attorney-General's department. There is no man In Congress for whom I have a higher regard, or who to my knowledge has worked more faithfully or intelligently for the best interests of the public than Mr. Townsend, nor do I question that those concerned in drawing the bill are less faithful to the public trust, but it does seem to me that there has been no sufficient, comprehensive, accurate, and detailed survey of the results to flow from It in practical operation, and as it will apply to the real parties at interest. I realize that my opposition to it might afford the occasion for the Attorney- General to decline to continue my service in that case if the bill becomes a law while it is pending, even if the clause to which I here object were eliminated, but the interests of my clients and those similarly situated as the cattle ship- pers are as great in this case as that of the railroads, and I can not, in duty to my clients, sit quietly by and not protest against so manifest injustice as would result from an act of Congress retiring their counsel while the railroad's coun- sel continue in the case to the end. I am certain that no member of the com- mittee intends such consequence. While I believe that the Government should pay for defending the commis- sion's orders, I believe that throughout the country those who have taken the burden of presenting their cases to the commission desire the right, to be exer- cised wherever they think it to be to their interest, to be heard when the final test comes in court as to whether they shall have and enjoy the fruits of their victory, the benefits flowing from the orders made in their behalf. Should the Interstate Commerce Commission under the existing law, or the Attorney-General under this bill if enacted, not see fit to employ such counsel as had successfully handled a case before the commission, or deem It unneces- sary to employ special counsel at all, as would generally be the case, the com- plainant should still have the same right to fight for his rights before the courts to the same extent as he did before the commission, subject to the case being in control of the Attorney-General. It would be availed of only in cases of great importance, and I can not see why it should be objected to if the At- torney-General is left in control of the case. The failure to provide for it would be an undue preference for the railroads. Respectfully submitted. S. H. Cow AW. BILLS AI'FECTING INTERSTATE COMMERCE. 1245 Also a letter from Mr. Edward F. Murray, of Murray's Line, Al- bany, N. Y., in relation to water-line carriers. Following is the letter referred to : Murray's Link, Troy, N. Y., February 19, WIO. To the honoraUe the Committee on Interstate and Foreign Commeroe, Bouse of Representatives, Washington, D. C. Gentlemen: On looking over H. R. bill 17536 my attention is attracted to lines 24 and 25, page 18, and lines 1 to 7, inclusive, page 19, which read as follows : "And in establishing such through route, the commission shall not require any company, without its consent, to embrace in such route substantially less than the entire length of its railroad and of any intermediate railroad operated in conjunction and under a common management or control therewith, which lies between the termini and would form part of such through route, unless the route by way of such last-described line of railroad is unreasonably long as compared with such proposed through route." If the intent of the paragraph is, as I read it, to restrict the operation of the proposed amendment to nothing less than substantially the entire length of a railroad, there will be, in my mind, but little use in passing the proposed amend- ments to the law, or spending much money in improving the waterways of this country. As an illustration : The Illinois Central Railway substantially parallels the Mississippi River from St. Louis to New Orleans, and between those points are the following — and many other prominent places, located both on the railroad and the river — namely, Cairo, Memphis, Vicksburg, Natchez, Baton Rouge, etc. If the proposed amendment is as it appears to me, the court of commerce could not compel the railroad company to make through or joint rates or proper divisions of same between any of these points and points beyond and the water lines, one terminus being New Orleans, but I do not know what the other ter- minus would be in this case. Another illustration in this vicinity : The New York Central Railroad owns and operates a through line between New York City and Ogdensburg, N. Y., going through Vermont via Rutland, Burlington, etc., which brings it under the jurisdiction of the Interstate Commerce Commission. On the line of the road and competitive with water transportation are the cities of Newburgh, Poughkeepsie, Kingston, Hudson, Albany, Troy, Burlington, etc. If I understand the proposed amendment correctly, the court of commerce would have no right to order the New York Central Railroad to put in effect through or joint rates, with proper divisions of same, between any of these places and the places on their roads or connections, and the water lines oper- ating on the Hudson River and Lake Champlain, and they would virtually have no competition from water lines, except on port-to-port business. I believe substantially the same conditions exist in hundreds of other places In this country. If the proposed amendments are to be of any benefit to the business interests of this country or to assist in the development of our waterways, I believe that it is necessary that there should be some power or authority to compel the i-allrcads of this country to put in force joint and through rates, with proper pro rata divisions of same, to apply between all stations with water transpor- tation carriers. Railroads should not be permitted to charge carriers by water any more for carrying the same classes of freight the same distance than they charge their most favored connection or patron. And if it can be legally and equitably provided, where water transportation and railroads come together, and there are no proper transfer facilities between them and the business will warrant it, there should be some power or authority to compel that proper transfer facilities be erected and a charge made to the property transferred tjiat will fairly reimburse the parties or party who builds the transfer accommodations. As I said to your committee. It is to my mind almost useless for the United States Government to spend hundreds of millions of dollars in improving the waterways of this country if there is not some power or authority to compel the railroads to join in through or joint rates and fair divisions of same at all points where water and rail connections are or can be made. It is not possible, except between very few places in this country, to main- tain all-water routes with proper facilities with port-to-port business only. 1246 BILLS APFEOTING INTEESTATE OOMMEEOE. The railroads should act as feeders and distributers to the water carriers, and vice versa, thereby giving to the manufacturing and business Interests of this country the benefit of the lowest rates that can be made to and from all points. If I can be of any use to your committee, I am at your service, and will appear before your committee at any time that will suit your convenience. I believe that this question in all its bearings is one of the most important that has been before Congress in many years. Thanking you for your consideration, I am. Respectfully, yours, Edw. V. Mtjeeat. Also a letter from Mr. E. 0. Adams, addressed to Ttepresentative Martin, of South Dakota, in relation to oil pipe lines, and so forth, as related to the proposed legislation. Following is the letter referred to: Washington, D. C, Drcemher 20, 1909. Hon. B. W. Maetin, House of Representatives, City: Sir : I recently noticed in the Associated Press report a synopsis of the rec- omniendatibijs the President and the Department of Justice have agreed upon with reference to requesting legislation by Congress creating a court to which appeals could be talscn from the decisions rendered by the Interstate Commerce Commission. It was also stated that special legislation would be requested which would give the commission a broader and more definite scope of authority In handling matters pertaining to interstate commerce and the regulation of freight-rate schedules proposed to be adopted by the railroads of the country. This proposed action is very good so far as it goes, but it occurs to me as a producer of oils that two very Important matters have been overloolied by the President and the Department of Justice, namely : (1) The Interstate Commerce Commission should be given power to compel all railroads to furnish tank cars for the transportation of both crude and refined oils and the right to regulate the rate to be charged for such transpor- (tation. (2) The proposed laws should declare all pipe lines used for transporting oil (crude or refined) to be common carriers In the same sense and for the same reason that railroads are made so. Both of these propositions should be placed under the jurisdiction of the Interstate Commerce Commission for the same reason that railroad rates are, and the commission should be given power to regulate the rate to be charged for transporting oils by the pipe lines as well as the railroads. Objection might be raised to the suggestion that the railroads be compelled to furnish tank cars for trnnsporting crude or refined oils, on the ground that those engaged in the business of producing and refining oils have heretofoife provided their own tank cars or pipe lines owning the same. In a measure this is true, but it is well known that these cars are the property of the Standard Oil Company, or some of its subsidiary companies, and that this company has practically controlled the oil markets of this and many for- eign countries and, by controlling the means of transportation, has to this time successfully prevented independent companies and individuals from operating to any considerable extent. As to the question of regulating the rates on pipe lines and making them common carriers, it is well known that the producing of crude oils and refining the same is to-day one of the largest, if not actually the largest, industry of the United States; that more people are interested, either directly or indirectly, in the producing and refining of oil than in any other industry in this country; and proper means of transportation should be furnished for transporting oils of all kinds, the same as for other commodities. There are at this time pipe lins running through many of the Middle and Eastern States supposedly owned by different companies, but none have ever been known to do a conmion-carrier business. What is known as the " Mid-Continent oil fields," comprising middle, west, and south, is crossed at present by three pipe lines — one supposed to be owned by the Prairie Oil and Gas Company, running through Oklahoma and Kansas in a northeasterly direction and connecting with the Standard's eastern lines ; one by the Texas Pipe Line Company, crossing Oklahoma and Texas, reaching the Gulf of Mexico by way of Port Arthur ; one by the Gulf Pipe Line Company, crossing Oklahoma and Texas through the Beaumont fields to the Gulf. A fourth line has been incorporated under the laws of Oklahoma as a BILLS AFFECTING INTERSTATE COMMERCE. 1247 common carrier. This is known as the Oklahoma Pipe Line Company and is owned by the Standard Oil interest. This line will cross Oklahoma, Arkansas, and Louisiana, reaching the Gulf of Mexico at Baton Rouge. These three lines all reach tide water at the Gnlf, and from there the oil goes to various parts of this country and to foreign countries by the cheap water transportation. The well-known fact that 60 per cent of the oil produced in the United States goes to foreign countries every year explains the reason why the pipe lines in every Instance go to tide water. , So far as the common-carrier principle is concerned, the arrangement at present is a mere mockery. The several States do not have uniform legislation affecting the transportation question, and hence it is impossible for an inde- pendent company or Individuals who produce oil to force the pipe lines to trans- port their products from one State to another, and unless the railroads are compelled to furnish proper tank cars for the transportation of oil, both crude and refined, it will be utterly Impossible in the future as in the past for any Independent producer to reach any of the markets of the United States with his oils or get them to tide water where they can be distributed by boat. At present, and It has always been so, the independent producer by reason of this fact is either compelled to quit producing oil and go out of business or sell to the pipe-line interests, and hundreds of thousands of people to-day stand face to face with this question— the value of their product being just what the pipe lines (Standard Oil) are willing to pay for it. There is but one relief, and that is for Congress to declare pipe lines to be common carriers in every sense of the word; compel the railroads to furnish tank cars for transporting crude oil and all its poducts, and provide a heavy penalty (both civil and criminal) for every violation of the law, and give the Interstate Commerce Commission power to make rates and regulate the busi- ness generally in so far as it relates to the transportation question. I have been engaged In the business of producing oil for a number of years past in the mid-continent field; but have never yet been able to find a market for my products except such as the Standard Oil Interests have voluntarily offered to give me, and to-day they are purchasing .oil from me at 35 cents per barrel, which, it is well known, nets them in the refined state from $10 to $14 per barrel. I can see no reason why Congress should allow the oil industry to pass nnnoticed while the Department of Justice is exerting every effort to dissolve the Oil trust, which has openly boasted time and again that its system of doing business is more eflScient than that of the Government Itself. The statistics furnished by the Government show that this industry has been constantly increasing since the civil war to the present time, and it is not sur- passed by any other in the United States to-day. It is also a well-known fact that not more than half a dozen of the Eastern States have been fully de- veloped with reference to the production of their oils. I may say the industry Is to-day yet in its infancy, and when we stop to consider test drilling made io the States of South Dakota, southern" Montana, Wyoming, Utah, Colorado, ■Nevada, and California have demonstrated conclusively that oil abounds in great quantities it becomes very plain to any observing person that these ques- tions relating to the methods of transportation should be settled for all time to come as soon as possible. It is impossible at present for the owners of prop- ertles in the States I have just mentioned to operate the same or find a market for any of their products, yet it is a little strange that people residing in those States engaged in other lines of business, live stock or mining, find it possible to get their products transported to any part of the country, while the owners of oil properties enjoy no such transportation facilities. If Congress should enact the legislation proposed herein, it would be possible for the owners of .properties in these several States to develop their properties, produce the oil, and reach the markets of their own and adjoining States, whereas at present they can not do this for lack of transportation facilities, and the people of these States are forced to use oil and pay transportation charges covering the same Shipped from the Atlantic coast and the Gulf of Mexico. There is no reason why the oil industry in one State should be allowed to remain in an undeveloped condition while the oil regions of some of the other States are being overtaxed and their product fast diminishing, in order to get oil to supply the people of the States with the same, when these people have enough oil within the borders of their own State to meet all demands. The in- dustry and legislation affecting the same should be such that it would be pos- sible for the owners of oil-producing properties, adjacent to any railroad, to 1248 BILLS APFEOTING INTEESTATE COMMEEOB. develop the same and know that their products would be transported to various points of market by the railroads the same as any other commodity produced in that locality. I am writing this letter to yriu trusting that it contains information with reference to this subject with which you have not heretofore been familiar, and hoping that you may be able to bring about the enactment of some legislation that will cover the ground fully and give the investing public the positive pro- tection to which it is entitled. Yours, very truly, , R. 0. Adams, Bond Building. Also a letter from Mr. Leonard Bronson, manager of the National Lumber Manufacturers' Association, in relation to certain amend- ments proposed by him upon the subject of car stakes. Following is the letter referred to : [The National Lumber Manufacturers' Association.] Chicago, III., February 18, 19X0. Hon. James R. Mann, House of Representatives, Washington, D. G. Deab Sie : Please allow me briefly to remind you of a matter of interest to the people I represent, and which was the subject of the hearing before the Com- mittee on Interstate and Foreign Commerce of the House of Representatives on January 26 and 27. The lumbermen do not feel that they are selfish in asking that when amend- ment of the interstate-commerce law is reported it be so worded as to require complete equipment of flat or gondola cars for the carriage of their products, because, as they believe, every other commodity of anything like equal impor- tance with theirs from the transportation standpoint is given equipment espe- cially designed to its needs. As I stated during the hearing, I am not a lawyer, and so may make sugges- tions that are not entirely apropos nor readily put into words, but it seems to me that a fair and comprehensive Inclusion of this matter in the law might be accomplished in substantially the following way: In section 1 of the act as it stands to-day, in the second paragraph, is a defini- tion of the term " transportation," reading : " The term ' transportation ' shall Include cars and other vehicles and all instrumentalities of shipment or car- riage," etc. If you should insert after the word " cars," or after the word " vehicles," the words " completely equipped for the safe carriage and protection of all commodities ordinarily transported in carload lots," it would, I think, substantially cover the point at issue and be fair to all classes of shippers. The exact wording to cover the purpose and thought I have is very gladly left to you. You are aware of our feeling that the railroads can well afford to furnish car stakes, binders, etc., in view of the fact that by their use they are able to transport a larger load on a cheaper car than where a box car is used. It would seem to the layman, in view of the verbiage that follows the part I quoted above, that this broadening of the definition of the term " transporta- tion " should be unnecessary. Seemingly, it would be covered by the words "all services in connection with the receipt, delivery," etc., yet the Interstate Commerce Commission has not seen fit so to interpret these words or to apply such an interpretation, and, therefore, I believe it is necessary that this inter- pretation, if it be sound, be written into the law. I do not know whether such an addition as I suggest should absolutely re- quire the railroads to furnish the equipment or whether they could simply pay for the equipment if furnished by someone else. The latter, if permitted, would undoubtedly be the way in which the matter would be handled at first, though I am sure that after the railroads had equipped a few hundred thousand flat and gondola cars with temporary stakes and binders they would soon devise some permanent arrangement, and be glad to do so; but perhaps it would be necessary to cover this point in the law — perhaps in the sections defining the duties of the Interstate Commerce Commission. If the railroads have the option of furnishing the equipment or paying for it, and choose the latter, the charge allowed should be absolutely fixed by the Interstate Commerce Commis- sion, either by an allowance in the rate per 100 pounds or by a fixed allowance on each carload. Some lumbermen think that reduction of 1 to li cents per BILLS AI-FECTING INTEBSTATB COMMERCE. 1249 100 pounds in the rate on forest products shipped on open cars would be a sat- isfactory way of settling the matter. I do not agree with that view, but am willing to leave it to the wisdom of the Interstate Commerce Commission, the only point on which I am insistent being that the rate or allowance, or what- ever it may be called, be fixed and published by the Interstate Commerce Com- mission as its investigations may determine to be just. If you can again call this matter to the attention of the committee and secure the incorporation of this idea in the committee's reported bill you will be doing a service to several of the leading Industries of the country, and at the same time, I believe, be doing no injustice to the railroads, but simply be placing upon them a duty which is properly theirs. The exact wording and form of the amendment desired I am glad to leave to the wisdom of yourself and the other gentlemen of the committee. I am writing this letter also to Hon. F. C. Stevens, of the committee. Very respectfully, yours, Leonard Beonson, Manager. Also, a letter from Mr. George F. Mead, of Boston, Mass., who appeared before the committee in relation to the bill-of-lading bill and propositions pertaining to that subject. Following is the letter referred to: [J. D. Mead & Co., produce and comiaission merchants, members National League of Com- mission Merchants of the llnited States.] Boston, Mass., February IS, 1910. Hon. C. G. Washbubn, Washington, 1). C. Dear Sie: Referring to House bill ]72(i7, relating to bills of lading, there is one provision which should be cbimged sn fiir ius it relates to order bills of lading. In the amended bill which I left wit^h you when in Wiishington, you will notice in the proviso to section 4 that order and straight bills of lading bearing the notation " Shipper's load and count " are exempt from the provi- sions of that section. This would work inestimable hardshii) upon the shippers of perishable goods, as the railroads would be sure to put this stamp on all bills of lading for perishable commodities, hoping to escape liability in that way. It would be inconsistent enough to put tliis on " order bills," for when a buyer or bank advances money on an " order B/L " and it becomes for all intents and purposes a negotiable instrument, they have a right to hold the railroad responsible for the number of packages called for in the bill of lading. I believe you will readily see the fairness of this claim, and I hope you will vote to strike " order bills of lading " out of the proviso in section 4. I am mailing you to-day a copy of a brief prepared by the car lines com- mittee of our league in support of a separate form of bill of lading for perish- able products, and on page 4 of this you will find substantial and, I trust, con- vincing reasons for our asking that this change be made. Ton are so busy with hearings, I presume, it will be some time before you can consider this bill in committee. Sincerely, yours, Geo. F. Mead. p. s. — Finding that I have but one copy left of the above-mentioned brief, I am mailing this to Mr. Stevens, who intrcxluced the bill and who will no doubt be pleased to furnish same for your information. Also, a telegram from Mr. Homer A. Stillwell, of the Chicago As- sociation of Commerce, concerning commercial travelers' sample bag- gage, etc. Following is the telegram referred to: CincAuo, III., 15. Hon. James R. Mann, House of Representatives, Washington, D. C: The Chicago Association of Commerce most emphatically indorses House bill 16019 — the Coudrey bill — providing for legalization of commercial travelers' sample baggage, and strongly urges its enactment into law. Homer A. Stillwell. 1250 BILLS APFECTING ISTEKSTATE COMMERCE. STATEMENT OF HON. JUDSON C. CLEMENTS, MEMBEB OF THE INTERSTATE COMMERCE COMMISSION. Mr. Clements. Mr. Chairman and gentlemen of the committee, the occasion of mj' coming here last week was at the request of the chair- man of the commission, lie having been delegated by the commission to speak for it in respect to amendments that Avere particularly re- ferred to by him, as well as to indicate the views of the commission with respect to the different bills, section by section, as he did last Friday and Saturday. I have nothing to say to the contrary or different from what he said in respect to the several amendments proposed by the commission, forwarded at the request of this com- mittee, together with its views with respect to the different bills and the several provisions in the chairman's bill (H. R. 16312). Our chairman stated the views of the commission in detail, and I do not want to express anything different from them in regard to those features. I therefore deem it wholly unnecessary on my part, from my standpoint, to duplicate what he said or go over that ground in regard to the provisions of these bills. But there is one suggestion that I would like to make in regard to the court provision, not in any different line from the suggestions made by the chairman of the commission, but he called special atten- tion to what the commission has suggested particularly in regard to a clear definition of the court's jurisdiction, so that no uncertainties may arise as to what shall be the limitations and powers of the commission in regard to the court as regards the question of rates and discriminations. And I am led to do that particularly because of the experience that was had in attempts to enforce the orders of the commission in the period since the act was originally passed, and more particularly before the passage of the so-called Hepburn Act. The condition was one of uncertainty, particularly in regard to the conflicting decisions of the different courts over the country in regard to the scope of their powers of review. It was exceedingly disappointing to the public in general that there was not a more definite line of demarcation between the powers of the commission and the courts in the orders of the commission, causing the delay in- cident to the attempt to enforce our orders under the processes then in force in respect to appeals, so that we regarded, since the Supreme Court in recent decisions appears to have put down a clear mark as to the powers of the present circuit courts in reviewing the orders of the commission, and makes clear the authority of the commission as well as the courts, that it would be exceedingly unfortunate to put that matter back again into a state of ui;icertainty and doubt and conflict which would require another decade of judicial interpreta- tion to clear up again. Mr. Baetlett. You think, then, that under the Hepburn Act, and under the recent decisions of the Supreme Court, the powers of the commission in enforcing its administrative orders when its juris- diction is not questioned, or when the question is not alleged to in- volve the Constitution of the United States, so far as exceeding the power is concerned, is as well instituted now, under the Hepburn Act, as it can be? BILLS AFFECTING INTERSTATE COMMERCE. 1251 Mr. Clements. If we properly interpret the recent decisions of the Supreme Court, I think it is. The Chairman. Permit me to interrupt you just a moment, Mr. Bartlett, and to ask Mr. Clements if he has aiiy formal statement tiiat he would like to make upon these subjects. Mr. Clements. I want to refer to the manner in which the judges of the commerce court might be selected. The proposition in this bill, as I understand it, is, if this court is established, that the judges are to be detailed by the Chief Justice of the Supreme Court, one to serve for a certain period of time, another a different period, and so on ; that is, the court is to be made up of assignments or details from the circuit courts by the Chief Justice. It seems to me in the scheme erf regulation of a matter so vastly im- portant as that of interstate commerce, affecting every interest in the country and every individual in the country, that a court that is to view these orders with respect to their constitutionality and regu- larity ought to be a court situated in such a way that its decisions would command the greatest degree of satisfaction and confidence on the part of the whole people — the railroads, the shippers, and the public in general — for, of course, there will be great controversy from time to time in regard to these matters, as there has been in the past, and anything that can be done in the constitution of this court that will contribute to the establishment of a court that would com- mand the fullest possible confidence and respect of all parties, it seems to me, is well worth doing. I do not mean to say that it would not in a reasonable degree accomplish that purpose in the manner constituted, but it seems to me that it is taking it out of the ordinary method of establishing courts, and there are several reasons why the other plan that has been suggested would be better; that is, that it should be constituted of judges appointed under the Constitution in the regular way that other federal courts are constituted. In the first place, it would be an anomaly and it would be a question of wonder why this court was made up in a particular way different from the way in which the Supreme Court, the circuit courts, and the district courts are made up, which are under appointment by the President and confirmed by the Senate. I think it would always be a matter of wonder why this regular constitutional method should have been departed from. Nobody has any greater respect for the Supreme Court and the Chief Justice of the Supreme Court, I think, than I have. But this commerce court, if one is created, is not for a year or a decade, but it is for the whole future ; it is a part of this scheme of regulation, perhaps the most important matter of legisla- tion in this country. The rates touch everybody. The railroads in 1907 received from all sources about $2,800,000,000, which was $100,000,000 more than the entire circulating medium of this coun- try, including hard money, certificates, and treasury notes — money of every form. Of course they paid back a very large percentage of that immediately, but an amount more than the entire circulating^ medium of the country has passed into their hands during the course pf a year. The questions of discrimination and reasonable rates will always be raised and must be passed upon by this court if it is created for the purpose herein intended ; and it seems to me also that it is hardly fair 1252 BILLS AJPFECTING INTBESTATE OOMMEECE. to the Supreme Court and to the Chief Justice to put the responsi- bility of detailing judges that are from time to time to make up this shifting court, which is not to make it a permanent personnel. That is hardly justice to the Supreme Court itself and to the Chief Jus- tice, who would be called upon to assume the responsibility of indi- cating the judges from time to time, and whose action would be im- mediately repealable by that court and reviewable by that court. It seems to me that, there should be independence of the Supreme Court — that is, independence as between the other courts, just as thej «xist now. The Supreme Court is not authorized to designate circuit judges to hold court and try any other class of cases, and I don't know why that should be the case in respect to the court created by this bill. And I think the court would be regarded as one of greater dignity, and that it would command greater confidence and would stand as an institution of greater strength in this general scheme which is intended to do justice in regard to all of these great matters, and that it would satisfy the people in a greater degree to the effect that justice is being done, and it would be much better, in my judg- ment, on that account. There are other considerations. These questions are more or less peculiar. That has been demonstrated by the line of decisions in the lower courts in regard to these matters ever since the law was passed. A judge very familiar with the statutes of the countr;^, in common law and in equity, is not very familiar with broad questions affecting rates and commercial conditions, economic conditions, competitive conditions, and rate conditions, as they change from time to time. Continuous contact with questions of this kind in the trial and review of cases would be of great advantage to a judge if he is to review these cases with intelligence and satisfaction to the public. Therefore, I think it would be far better, in the constitution of this court, that the judges should be appointed by the President, who himself is , elected by the people every four years, than that they should be de- tailed on a shifting court, changing from time to time, by the Chief Justice, who holds office for life. And I say this not in the slightest derogation of the Chief Justice of the Supreme Court or any member of it. But again I say that this court is not constituted for a day, ora decade, but for all future, and as a part of this scheme affecting this great business. I think such a court appointed in the usual way would command the confidence of the country and of these conflicting interests in a way that a court constituted in any other way would not. Mr. TowNSEND. What do you say as to the suggestion made by Judge Knapp, that these judgeships should be for life on this particu- lar court, instead of being selected from the circuits? Mr. Clements. I think that is the only constitutional way. There are federal judges appointed, and must be appointed for life, and I think if the court is to be constituted that that is the way it ought to be done — appointed by the President, confirmed by the Senate, and made a permanent court. Mr. Washburn. I would like to ask you how many cases are now pending in the court to set aside the orders of the commission ? Mr. Clements. Well, about 30 or 31, I think, is the number that have been brought since the Hepburn Act was passed, and two of those have been disposed of. BILLS AFI-ECTING INTERSTATE COMMERCE. 1253 Mr. Washbuen. Reading from your report of December 21, 1909, I find this language : The commission has contended that under the Hepburn amendment its orders, in so far as they involve the exercise of discretion or judgment, could not be re- viewed and set aside by the court, since to that extent its action was legislative and not judicial. And then, after speaking of the matter further, the report goes on to say: The Supreme Court of the United States has not passed upon that precise question, although its decisions seem to sustain the view of the commission; but three judges sitting as a circuit court under the expediting act in the eastern district of Pennsylvania have recently handed down a decision which entirely sustains our contention. Now, since this report was printed the decisions of the Supreme Court have been rendered in the case of the Illinois Central Railroad Company against the commission and with respect to some other mat- ters, and I understand you to say, with those decisions confirming the views of the commission, that the courts can not review or set aside the conclusions of the commission except where a constitutional ques- tion is involved or the powers of the commission itself. Mr. Clements. That is what we understand to be the effect of these decisions. Mr. Washburn. Now let me ask you if the recent decision of the Supreme Court to which you have referred would, in your opinion, decrease considerably the business which would naturally come before the newly constituted court of commerce? Mr. Clements. Well, I certainly think it would. I think when it becomes a well-recognized and settled principle of law that an order made by the commission can not be alleged by the carrier to take its property without due compensation, and to be confiscatory, that the carriers would desist from entering the field and undertaking to contest the matter ; that is to say, when it is well settled that they can not secure the substitution o:^ the discretion and judgment of the court for that of the commission, simply upon the theory that the rate was made a little too low by the commission or for some other reason, and that they could not allege that it was a violation of the Constitution, then they would not file these cases as ofteh as they have in the past. Mr. Washburn. Then, under this condition in which we now find ourselves as a result of this decision of the Supreme Court, have you any doubt in your mind as to whether this proposed new court would be kept busy? Mr. Clements. Well, it is very difficult to tell how far the carriers would find it to their interest, or believe it to be to their interest, to allege confiscation until that is tried. There would, of course, be a good deal put onto that court by the provision in this so-called ad- ministration bill — the Townsend bill — in regard to the control of competing lines, and the question of fact in regard to whether or not lines are competing lines and whether they fall within the inhibitions of the Townsend biU or not, and as I understand it they are to go to this court. Mr. Washburn. Do you think that, the question of determining whether lines are or are not competing migh^ safely be committed to the commission and not to this new court? 1254 BILLS AFFECTING INTEESTATE COMMEECE. Mr. Clements. Well, I don't Imow how much more could be put upon the commission with safety, so that it might keep thoroughly up with its work. It is difficult to tell beforehand how much that would involve in the way of investigating work. Mr. Washburn. But it lies right along the line of the regular work of the commission. Mr. Clements. Yes; it is closely related. I have always felt that competition affected rates ; that the public policy of the country was to leave competition to do its natural work in the question of rates so far as it can be done. Mr. Washburn. If it were not for the new duties conferred upon this proposed court in this pending Townsend bill, and if the business of the new court were confined to the business which now goes to the courts from the commission, and in view of the recent decision of the Supreme Court, do you still think this new commerce court would find enough work? Mr. Clements. It is very difficult to answer that question — to an- ticipate the future. Of course, these questions where confiscation is alleged in respect to important work would present a very large question in a single case for the court to deal with, but how far the necessity of such a court, as appeared a few months ago, would be obviated by these decisions in the diminution of controversies to go before the court, is hard to tell. To illustrate what I have just stated about the importance of a case, and the length of time that possibly migh be required by one case, we may take the Northwest Pacific Coast lumber case, where the roads advanced their rates two or three years ago materially on shipments of lumber from Washington and Oregon to all eastern points; and after hearing, and the rates had been in effect for eleven months, the commission determined that these advances were for the most part unjustifiable, but did justify some parts of the increased rates in certain territory. The carriers in that case did not undertake to enjoin our order; that is, they didn't undertake to get an injunction. They put in their rates and pro- ceeded to pay reparation on shipments on the basis of our decision. But at the same time they did file a bill for injunction, and they have been taking testimony on that for months; have had it before a special master taking testimony, in respect to the value of the roads — the Northern Pacific and other great trunk-line roads — their capi- talization and their reorganization from time to time, and the volume of their business. The many questions which they have been going into in respect to matters of great moment, such as the rates on lum- ber over a large territory, practically two-thirds of the United States, must take so much time itself that it requires a long time to in- vestigate them in respect to the question of confiscation ; and where we are going to ascertain the value of the road, what it ought to earn, and how far its earning capacity will be affected by the particular order made in the case, it takes a long time to investigate intelli- gently, and to determine any such question as the constitutionality of the rates made by the order. So that I can imagine that not a very great number oi cases would keep the court fairly busy,- if they raised questions of that sort to be tried on facts in regard to valu- ation and reorganizations and their profits and expenses in doing their entire business. BILLS AFFECTING INTERSTATE COMMEBCE. 1255 Mr. Washburn. How many of the pending cases, as you recall, involve constitutional questions of the kind that you have re- ferred to ? Mr. Clements. I have not undertaken to analyze the cases with reference to that ; but a good many of the cases that have been brought would be, in fact, minor cases as compared with a case such as I have referred to. Mr. Washburn. Do you have in^mind how many of the pending cases would be affected by this recent decision in the Illinois Central case? Mr. Clements. I have not, other than as Mr. Knapp stated here the other day, that he had asked one of our attorneys to indicate, among some 30 cases now pending, how many of them would prob- ably not have been brought under the present interpretation of the law by the Supreme Court, and I think they made out that it prob- ably would not have diminished the number of cases more than 6 or 6, and that there probably would have been some 25 cases yet under the law as now. Of course, it is easier to know that many of them would be very unimportant cases. The Chairman. You say that you have had 31 cases brought in the courts since the Hepburn bill was eilacted ? Mr. Clements. I think that is right. The Chairman. That certainly would not be to exceed nine or ten a year. Mr. Clements. Well, it is fair to say that practically all of those have been brought in about the last year and a half; nearly all of them. The Chairman. Is that the case ? Mr. Clements. That is the case, as I understood the chairman to state. He looked into that particular matter and stated the other day. I may have misapprehended what he said, but I think that was it. The Chairman. That there were no cases brought into court until two years after the Hepburn bill was passed ? Mr. Clements. I said a few, but practically that. The Chairman. Practically that? Mr. Clements. Perhaps after a year and a half. I know when we made our annual report, I think for the year 1908, there were very iew contests at that time. Mr. Bartlett. According to your report for 1908 there were 17 up to that time. The Chairman. And is that about the normal proportion ? Mr. Clements. Yes. The Chairman. I wondered if all the railroads for a couple of years had quit litigating on account of the passage of the Hepburn law. Mr. Clements. What I meant to say was that a year went by after the Hepburn law was passed before there were many cases filed. There was a little while elapsed before the commission got to making any orders, and then many of them were upon rather minor matters. And, as always happens, when one of these bills making definite advances is passed in relation to regulation there is a short time when the railroads practically acquiesce in what the commission requires. 1256 BILLS APFECTING INTERSTATE COMMEECE. The Chairman. Do you think — and you have knowledge of the character of the cases — that 10 or 20 of these cases could occupy a court and keep it busy for a year, providing it did not take the testi- mony itself? Mr. Clements. I should think not. If the testimony is taken by other instrumentalities, then I do not see how they could be engaged the whole year upon that many cases. The Chairman. If we should provide a court such as you suggest, to be appointed by the President for life, but should want to dis- continue that court in a few years, what would happen then? Mr. Clements. I have not looked up the question as to the dis- mantling of a court, and what you would do with the judges; but I believe there would not be dny difficulty about abolishing the court. I don't suppose that Congress is bound to maintain forever all of the courts that they create from time to time. Mr. Bartlett. I may say that there was a time when they abol- ished all of their courts; when Congress passed an act abolishing them ; and there was a bill introduced by Senator Hoar to reorganize the whole judicial system, which would virtually abolish quite a number of the district and circuit courts. Mr. Richardson. They did not abolish the place of a judge hold- ing an appointment for life. Mr. Bartlett. But they could cut off his salary. Mr. Clements. That has not occurred to me as a practical mat- ter, Mr. Chairman. Mr. Kennedy. With reference to competing lines, we had before us a gentleman who contended that all lines competed in this coun- try, and to a certain extent perhaps they do. If we should provide with reference to competing lines as we do in this Townsend bill, the question of whether two lines competed within the limitation that we may put upon that legislation in the bill would be a question of fact, wouldn't it, always? Mr. Clements. I think so. Mr. Kennedy. You have no power to legislate, but are a legisla- tive commission, to act within the instructions we give you, and the questions would always be a question of fact which could be litigated in court as to whether two lines were competing in the manner which we described in the law or not. Mr. Clements. I think it would not always be an unnecessary question in a case where it was alleged they were merged when they were competing lines. Mr. Kennedy. You would have a discretion to determine what kind of competing lines you would inhibit from combining; but that is to be fixed by law. Mr. Clements. I should think so. Mr. Kennedy. So that might be a prolific source of litigation. Mr. Clements. I should imagine a good many complicated cases would arise under a provision of that kind. The question was asked of the chairman the other day by some one, referring to the importance of having rules— that is, principles — to guide the commission, so that it would not be simply an unbridled discretion in regard to dealing with these questions — I don't mean that anybody used that word, but I use it myself, not thinking for a moment of a better one — of having the act in such a way that the BILLS AFFECTING INTERSTATE COMMEEOB. 1257 commission, although it is vested with a combination of legislative power and administration, and different theories have been presented as to that, should have the authority of law for what it does or what it is restrained from doing, so far as it is possible to write into the' law rules that shall govern. The Supreme Court in interpreting the' antitrust law was appealed to by the railroad lawyers in the joint traffic cases especially, and they went so far as to hold the case for re- argument at the request of the railroad attorneys, with a view of having revised their opinion in the trans-Missouri case, and hold that the meaning of the antitrust law, which declares any agreement, con- tract, and so forth, to be illegal and in restraint of trade and inter* state commerce, to condemn only such contracts in restraint of trad© as were unreasonablj' in restraint of trade. But the Supreme Court has steadfastly adhered, on reargument of these several cases, to its original determination, that it was the policy of the law and of Con- gress to provide contracts of that sort, and have refused to qualify the meaning of the words of the statute to say that only unreasonable restraint is prohibited, but restraint of trade. Of course, they, have gone far enough to say that it is a direct restraint that is forbidden, and that there is a field where it can be said that the action of car^ riers is not directly in restraint of commerce where they affect it in some remote degree, such as competition in lines not parallel and far removed from one another; in such a case it may be said that there is some degree of competition; but it is remote and indirect in many cases. And I assume that any court in reaching questions of that kind would exercise the same rule of construction that they have indi- cated in regard to the antitrust laws. Mr. Washbtten. You think, Judge, then, that the Supreme Court has never in any way, in its more recent decisions, modified the doc- trine laid down in 1897 in the trans-Missouri case, touching the inter- pretation of the Sherman antitrust act ? Mr. Clements. I do not think it has. Mr. Kennedy. If we should qualify this part of the Townsend bill that we have been talking about by putting in the word " parallel," to define what railroads should not form a combination, the question of whether a road was so nearly parallel in a mathematical sense as to be within our meaning would be a question of fact, would it not ? Mr. Clements. Yes, I think it would ; and yet there are numerous decisions of state courts defining what a parallel line is. I have not looked them up with reference to this immediate question, but many of the States have that language in the law— of prohibiting mergers of competing and parallel lines. Mr. Baktlbtt. They have in the constitution of the State of Georgia. Mr. Kennedy. It makes no difference how definite the law may be, a question can be raised which will be a pure question of fact, whether or not you are within the language. _ ^ Mr. Clements. Undoubtedly; I think so. Mr. KiCHARDSON. I want to ask if, under the Townsend bill, the commerce court is not clothed with any other or additional jurisdic- tion over the orders and proceedings of the Interstate Commerce Commission, and if the circuit court has not now the same jurisdic- tion that the commerce court would have over matters, orders, and proceedings of the Interstate Commerce Commission? 23738— PT 22—10 2 1258 BILLS AFFECTING INTERSTATE COMMEROE. Mr. Clements. As we understand it, it is the intent of the bill creating this court to confer that power, and no more. We have suggested some particular language with a view of other expressions in the bill, which we regard as necessary in order to make absolutely- sure that that would not happen. Mr. TowNSEND. Have you seen the last bill that has been pre- sented ? Mr. Clements. It was brought to my attention the other day dur- ing the session, and I have not had a chance to look it over. Mr. EiCHARDSON. I think that Mr. Knapp stated that the jurisdic- tion was the same, and I wanted to inquire wherein and how the public interest is benefited by the establishment of a commerce court that has exactly the same jurisdiction and no more than the present court has. Mr. Clements. As I understand the formation of this court — and that has been my understanding from every source from which I have heard it, so far as the Interstate Commerce Commission is con- cerned, and also the members of this committee so far as they have been in favor of a court — was for the purpose of expediting to finality these controversies. Mr. Richardson. Finality? Mr. Clements. Yes, sir. Mr. Richardson. Haven't they a right to appeal to the Supreme Court? Mr. Clements. Undoubtedly; but they could get there quicker through a court of this kind, for instance, in a case where the Cali- fornia dockets should be crowded The Chairman. You say that they could get there quicker? Mr. Clements. I think so. The Chairman. The only grounds upon which an appeal can be taken are the grounds of jurisdiction or a constitutional question, upon both of which it is assumed that probably an appeal to the Supreme Court of the United States can be made. So, how will the ■case get there quicker and go through the intermediate courts when it can go just as quick — that is, go directly to the Supreme Court from the circuit c6urt? Mr. Clements. As it is now it goes to the circuit court first, and under the expediting act, upon the certificate of the Attorney-General ithat it is a case falling within the provision of the law, it is neces- sary to get three judges together before they can consider it — that is, one judge is not authorized to enjoin the orders of the commission; it takes a court of three on a certificate of that sort from the Attorney- General. The Chairman. It takes the same number of judges that sit in the circuit court of appeals? Mr. Clements. Yes, sir. The Chairman. And there are always three, practically, at those places? Mr. Clements. Well, we have found in actual practice that in a number of cases it quite often occurs that they could not be had at the time the case was set down for hearing — at the time the notice was given — and in some cases we have had to extend, on the sugges- tion of the court itself, the effective date of our order ; put it forward to give the court time to reach the case before the order would be- BILLS AFFECTING INTERSTATE COMMERCE. 1259 come effective. Of course I suppose that could all be taken care of, so that it would not ultimately result in great delay due to that fact alone. But take an order that becomes effective in July or August, when the courts have adjourned on vacation and have closed their business for the season, some of the judges are abroad and some at various resorts having a rest. In that case, if an important matter should come up, it would be impossible to get them together. Mr. Adamson. If you should have made a mistake in your esti- mate as to the probable amount of business of this court, and, on the contrary, a great multitude of cases should get into that court, wouldn't it be possible for business to be just as congested in that court as it is under the present system ? Mr. Clements. Yes ; of course, if there should be such a vast num- ber of cases. But I would not anticipate, judging by past experience, that the court would be overwhelmed. Mr. Adamson. If the carriers should regard only one channel, which would be created by that court, as better adapted to the ap- peal, and the congestion of the court would give them more time, then it would afford them a good reason for favoring this court, would it not? Mr. Clements. Well, it might; I don't know. I had not supposed that that was any motive that had actuated them, and I really do not know to what extent they do favor it. Mr. Adamson. Have you observed that they are anxious to ex- pedite the trial of all these cases ? Mr. Clements. No; we have not as a rule. Under the old law, where the commission had to go forward and get a decree enforcing its own order, we had a great deal of trouble, and there was great delay and difficulty in bringing the cases to a hearing. Under the proposed act the matter is reversed, the order of the commission automatically becomes effective by its own virtue at the end of the time fixed by the order of the commission, not less than thirty days, so that the carriers must go into court in order to get rid of it. Mr. Adamson. I suppose the purpose of this provision is to ex- clude the jurisdiction from all other courts upon these specified pur- poses so that the commerce court judges can do these particular things ? Mr. Clements. My understanding is that it does exclude all other courts, and the argument for it was to avoid the confusion of con- flicting and various views of the different circuit judges all over the country. For instance, a circuit would have one case of this kind, a rate case, and perhaps no other for two or three years; and I have thought in a great many cases that they give their opinions and de- cisions, with all due respect to the courts, in a way to indicate that they were not as familiar with cases of this sort as they were with cases of common law and equity that ordinarily came before them. The Chairman. The proposition in respect to the creation of the commerce court is in order to have a court pass upon questions involved in civil suits affecting freight rates and other railroad matters ? Mr. Clements. Yes, sir. The Chairman. Are not the larger proportion of cases affecting those matters, cases that relate to the action of state boards and state rates, involving practically the same questions as are involved under 1260 BILLS APFECTING INTEESTATE COMMERCE. interstate propositions; and if so, if the commerce court should be created to determine with reference to interstate propositions upon the ground that you would get better decisions that way, should not that court be vested with extlusive power to enjoin the enforcement of state laws and the orders of state railway commissions, and so forth? Mr. Clements. Well, it would be difficult for me to offer any rea- son why the matter should be differently treated. If it is a consti- tutional question, a question of confiscation, whether it is a state rate or an interstate rate, I would not be able to offer any reason why, when a federal court is appealed to to enjoin a confiscatory rate, the same argument made to this court would not apply to the state rate as well as the interstate rate. It is a question of power under the Constitution of the United States, a federal question, and I should think that the same reason that would be determined by this court in the one case would apply to the other. Mr. Washburn. Inasmuch as the cases hereafter to be brought are likely to be, most of them, those involving constitutional questions, if there is a disposition on the part of the circuit court to hasten the proceedings, there is no reason, is there, why they can not be certified very promptly to the Supreme Court? Mr. Clements. Do you mean decided? Mr. Washburn. I mean certified to the Supreme Court under the terms of the so-called expediting act, which provides that in the event of the judges sitting in such cases being divided in opinion, the cases shall be certified to the Supreme Court for review, and so forth. Now, with the circuit court, recognizing that a constitutional question is involved, is there anything to interfere with its being promptly certified to the Supreme Court? Mr. Clements. The Supreme Court has recently decided, as I un- derstand it, that that provision for certification on the basis of a division of opinion in the lower court is not good except perhaps where they are equally divided. That would make a case go to the Supreme Court. But they have decided where two judges differed from one on the same bench in one of those cases, that they could not certify the case up and make the Supreme Court try the case orig- inally. Mr. Washburn. Is there any reason that occurs to you why this expediting act, if it is not in satisfactory shape now, could not be so amended as to insure speedy hearing of these cases by the Supreme Court ? Mr. Clements. It all depends upon whether you could secure a speedy hearing from the court below. I think the Supreme Court will hold that these cases can not, by any authority of legislation, be put up to it to be originally tried de novo. They have practically said that that was a court of review only. Mr. Russell. What is your opinion about the proposition to ]imit the right of the Interstate Commerce Commission to appear before the court of commerce and take part in the conduct of any litigation in the court of commerce ? Mr. Clements. That is a matter which I think under the present law the Attorney-General could take entirely under his own control — that is, the law says that when proceedings are instituted by the com- mission it shall be upon the request of the district attorney, who shall BILLS AFFECTING INTERSTATE COMMERCE. 1261 file and prosecute a suitable proceeding under the direction of the Attorney-General. So I suppose that that could be done now. The real practice in the past has been that Congress gave an appropria- tion which could be allotted for the employment of special counsel in particular cases. I think that appropriation has been limited to $20,000 for some years. The Chairman. You do not bring suits yourselves any more? j\Ir. Clements. That was commenced under the old law when we did bring suits, and the same rule has been followed since. Under the Hepburn Act we had an allotment in the general appropriation for the support of the commission that we could use for the employ- ment of special counsel in particular cases, under the approval of the Attorney-General. It was all subject to his approval under both statutes. Mr. Russell. The proposed law, in section 5, says: The Interstate Commerce Commission and its attorneys shall take no part in the conduct of any such litigation. Mr. Clements. "Well, of course it must be frankly admitted that a ])rovision of that sort is liable to work out something like this, and I don't know whether it will or not. I don't know how far it might embarrass the enforcement of these orders in the future, but in many of these important cases the lawyer representing the complainants has worked out all the facts and presented them to the commission, and they are familiar with the questions of fact and law and the traffic conditions involved in the matter ; and in some cases have done a vast amount of work in the preparation of the cases originally before the commission, and of course a provision of that kind would render unavailable his services in the case, and the usefulness that he might be in the conduct of it, due to his great familiarity with it from beginning to end in all its details as to questions of law and fact. Mr. Tow>-SEND. Has there been any conflict between the attorneys for the commission and the assistant attorneys-general ? Mr. Clements. I don't know to what extent. There may have been some slight misunderstandings in regard to some questions of law that could be stated in a brief. Mr. Prouty, a member of the commission, has had direct touch with our lawyers in the preparation of these matters for the courts. I think there has been some differ- ence of opinion as to questions of law that should be stated or con- tended for in some of these briefs. I don't. know that we can say that it was a serious conflict. Mr. TowNSEND. Would it be embarrassing to you— and you need not answer the question unless you wish — to answer this question, whether Judge Prouty himself, who had charge of the law end of the compiission, is not favorable to the Department of Justice taking exclusive control of these matters? Mr. Clements. Well, I do not know whether he favors it or not. I ought to say that I do not understand that he is making any oppo; sition to it. . ■, , , j. , Mr. Adamson. In changing attorneys it is possible before the court to present the case in such a shape as to make a different appearance of it entirely, is it not — that is, in hearing the same case ? Mr. Clements. The Attorney-General might, of course, not think that the commission had decided the case right, and he might think 1262 BILLS ATPECTING INTERSTATE COMMEBCE. that it was an order that was not defensible. I do not know whether any trouble would come out of that or not ; I have not apprehended that there would, but of course it is possible. Mr. Adamson. A different set of lawyers might proceed in a differ- ent manner in presenting the case and present it in an entirely differ- ent aspect to the court, so that the court would not pass upon the same matter that you passed upon really. The Chairman. Does not the present practice sometimes lead to considerable extravagance in taking care of cases? For instance, I had my attention called last spring, when I was home, by accident, to three attorneys from the Interstate Commerce Commission, each appearing in Chicago before one of the courts there — all before the same court — and each one in a different case, on a motion where the entire three motions were disposed of in less than ten minutes' time, but it required three attorneys of the Interstate Commerce Commis- sion to make a special trip to Chicago, on a limited train, in order to appear in three cases on formal motions that I would have sent an office — not an office boy, but a clerk in the office — to attend to, and to all three of them at once. Mr. Clements. Well, Mr. Chairman, I doubt if you would send an office boy from Washington to Chicago to attend to a matter in a federal court. The Chairman. I would not send an office boy from Washington to Chicago to attend to a matter of that sort, but I should have writ- ten to the district attorney in Chicago and directed him to appear in court on a formal motion that would be granted as a matter of course. Mr. Clements. I don't know what the motions were nor what the cases were, and how far they would have been granted as a matter of course. But it has not been our experience that we were alwaj-s very safe in the presentation of these questions, with even good law3'ers not familiar with the special nature of them, and with the line of controversy. But I am perfectly free to admit that on the state of facts to which you refer there seems to have been unnecessary dupli- cation in the presentation by the three lawyers. I don't know the special cases in which they appeared, but it must have been quite certain that that would be an unusual thing. The Chairman. I am not making that statement as a criticism of the officials, as perhaps no one of the three knew that the other was to make a motion of that kind. Mr. Clements. There has been a liability that controversies that have arisen in Iowa would come up in Chicago — I don't know whether Iowa is in that circuit or not — but one attorney for the com- mission might be in Iowa, if that is the case, in the conduct of one case and another in another circuit, and these motions were simply inci- dental in the same way, and the attorneys being in different parts of the country and looking after these things from different stand- points might not have been aware that each one was going to be there in reference to the cases that came up from the different States. But undoubtedly a little administrative attention to the possibilities of such things happening as that would result in their correction. I am perfectly certain that there has not been enough of it to amount to any serious expenditure of money or to any extravagance. BILLS AFFECTING INTEESTATE COMMERCE. 1263 The Chairman. I would like to direct your attention to another matter in respect to water carriers. Have you noticed the arguments ' that we have printed of Mr. Hayne, who makes a very vigorous protest against including the law as to water lines? If you haven't noticed the argument, I wish very much that you would look it over— you and the other commissioners, if you please — and give us your opmion with reference to the amendment that he suggested. Mr. Clements. I have not had a chance to read these hearings. The Chairman. I think that the amendment that is suggested is to the effect that the commission shall not have power to make a through route, including a water line, where a satisfactory through route exists, although they may have that power as to the different railroad lines. Mr. Clements. Well, I would be glad to look at that and to take it up with the commission. I have not been able to read the reports of the hearings yet. The Chairman. Of course, that is an important matter to know, whether we are changing the statute by leaving that little provision in the Townsend bill, which is already in the law, but which may cause a change, by other changes in that section, not contemplated. Mr. Clements. Most of the matters that have come before us in a particular way have been complaints, formal or otherwise, on the part of water lines originating business on a river, for instance, that could not get a through-route arrangement with the connecting rail- road which already had one with another water line on the same river. The Chairman. I have suggested this matter, upon which I am utterly at sea as much as a floundef-ing vessel would be, and I wish you would give us an opinion upon that proposition. Mr. Clements. I will look into it. Mr. Staitord. Have those compJaints arisen in respect to the in- terior waterways, or have they been also applicable to the coastwise trade? Mr. Clements. Most of them in the interior water lines. One of the earlier cases applied to the Tennessee Kiver, before I was a mem- ber of the commission. There was a steamboat line plying between Decatur, Ala., and Chattanooga, Tenn., and the Louisville and Nash- ville Kailroad, I think it was — it may have been the Nashville, Chattanooga and St. Louis Kailroad, which is controlled by the Louisville and Nashville — had an arrangement with one boat line and refused to make one with another line. The commission held that it had no authority to compel a through route, and you can see how easy it is for a railroad commanding a situation like that to give the river business to one boat line and destroy the other by simply doing what under the law it was permitted to do — make the through arrangement with one and refuse it as to the other. Mr. Richardson. That was a boat line running between Hobbs Island and Gunterville. There was some provision in the river and harbor bill bv which there was an appropriation of $15,000 to dredge a channel between Hobbs Island and Gunterville, because there is a boat line which carries the mail there; the people are absolutely de- pendent upon it, and there are times Avhen for four months, on ac- count of low water, it can not operate. I think that is the boat hne you refer to. The Nashville, Chattanooga and St. Louis Railroad 1264 BILLS .Uj-FECTrXG INTERSTATE COMMEBOE. does not rim to Decatur, but it does run to Huntsville and connects ■with the river at Hobbs Island, and the boat line runs from there on. Mr. Clemen'J'S. That was a former case decided by my predecessor •on the commission. Mr. Stafford. Then, as I understand the complaint in the case you instanced, it was that the railroad delivered some traffic to one indi- vidual boat line and refused to share it with the other, rather than that the railroad connecting line refused to receive from the boat line and dispatch it over the rail line ? Mr. Clements. I think it was both ways — that the railroad had an arrangement of through rates with the boat line and would take a division of* less than its own railway rate on through business going from one boat line, but would charge its full railroad rate on business oflFered by the other boat line, so that the tendency was to drive all the business to one boat line and away from the other. We have had several cases of that kind, one on the St. Johns Eiver in Florida. Mr. Staefoed. Have an}' cases arisen in connection with trade on the Great Lakes? Mr. Clements. I do not recall any question of that kind there. Of course, a great many cases have arisen in regard to that business, but most of those boat lines are regular lines and are owned by the different railroads. The Xew York Central has its line of boats, and so do the other roads there; yet they are incorporated, most of them, i£ not all — managed — as separate boat lines, but owned by some railroad system. Mr. Stafford. But the gentleman who appeared here the other day, in protesting against extending the jurisdiction of the cominig- sion, represented an independent line, and not lines such as the An- chor Line, which operates in conjunction with the New York Central, but a line such as the Detroit and Cleveland Navigation Conipany, the Goodrich Line of steamers from Chicago to Milwaukee, and other independent lines which are not, as I understand it, controlled by railroad companies. In the same way with the representative of the Mallory Line, which, I understand, is an independent line. He pro- tested against any such authority being vested in the commission. Mr. Richardson. I don't recall distinctly, as you do, the facts connected with the Nashville, Chattanooga and St. Louis Railroad and the Tennessee River, but don't you think that the Nashville, Chattanooga" and St. Louis Railroad did its own boating toward the ■city of Huntsville, and handled through traffic from Nashville to Attalla by way of Guntersville and the river, and refused to give another competing boat line the same terms? Mr. Clements. That case was heard and determined by the com- mission before I was a member of it, but I am perfectly certain that the railroad did not own their boat at that time. This was a test between boat lines; one wanted the through business and it was de- nied. And the same thing has often taken phici' in other places. The importance of this matter, so far as I see, is mainly fiiv the pur- pose of giving a boat line, situated like that, a fair chance to do busi- ness, and to give the public any benefit of competition that comes from it in the use of these rivers upon which the Govei-nment spends so much money to make them a^'ailable for that business. And I do not suppose that that would interfere with the proposition that this BILLS AFFECTING INTERSTATE COMMEKCE. 1265 gentleman has. He was undoubtedly looking at it from some other standpoint. The Chairman. We will furnish you copies of hearings containing those arguments, and I would like to have the commission give us a written opinion in reference to them. I %yould like to direct your attention to another matter upon the question of the time during which the rate shall be suspended. The Townsend bill proposes two months, and your commission has sug- gested four months. Can you give us an idea about how long it takes your commission now to hear and determine an important case in- volving rates? Mr. Clements. Well, I referred a moment ago to the Northwest Pacific Coast lumber cases, which were very important ones. They were all practically handled as one, although there were several of them, but thej' were disposed of in one record, and we disposed of them in about eleven months. But, of course, in the meantime there were many other things done. They were, however, handled with a good deal of expedition, under all the circumstances, and they in- volved the rates from the States of Washington and Oregon to every place in the East, and from Idaho to the Atlantic Ocean. The Chairman. Assuming that we do not desire the commission to abandon its ordinary duties, would it be practicable for the com- mission, when it ordered a rate suspended where the matter involved probably a great many rates in different parts of the country, to hear and dispose of the merits of the proposition within two months' or four months' time? Mr. Clements. I think it would be very difficult, if not impossible, to do it within either period in some cases. In August, 1908 — I think it was 1908 — the chairman of the railway commission of Texas, with Senator Culberson, came into our office, along in August. I think it was, and protested against the increase of rates from all points in Texas, class and commodity rates, and all. The notice had been given that there would be an increase on the 10th of August, perhaps, and a few days before thej' were effective these gentlemen were there to find some way to protest against it, and we told them that the only safe way would be to institute a proceeding that would be clearly within the law and to file a complaint. Some intimation was made on their part independently, on their own initiative, to the effect that we should investigate it, but we pointed out the question of doubt if we did that, and suggested that if we reached a conclu- sion and made an order condenining these increased rates, the ques- tion would be raised as to whether or not we had any jurisdiction, since the fifteenth section of the Hepburn Act says that upon full hearing the commission can prescribe a through rate, and they ought not to put in right at the threshold a question of controversy that might endanger the whole thing if an investigation was had. It was very important, and it covered a large field. They filed their complaint, and some members of the commission first went down to St. Louis and spent three or four days there taking testimony, and it was suggested by two or three parties that there ought to be testimony taken in Texas, and an appointment was made there, and a week was spent there taking testimony ; and at the con- clusion of that there was further testimony to be taken at the request of the parties. The complainants wanted to present testimony them- 1266 BILLS APFECTING INTEKSTATB COMMEECE. selves, as well as the railroads, and quite a number of months have been spent in taking testimony at different places at different times, and the proceedings, of course, had to be interrupted on account of the engagements of the lawyers in other matters in other courts ; and in a case of that kind it seems to me impracticable always to be able to investigate these things and determine them either within two months or four months. We had another case of that kind arising with respect to grain rates from the Ohio River to Atlanta and southeastern territory, and when we had gotten through taking testimony in that case the law- yers for the complainants wanted sixty days in which to write their briefs and get ready for an oral argument after the testimony was completed. The complainants themselves asked for sixty days in which to complete their briefs alone, so that as a practical matter, if these matters are to be thoroughly investigated, and then the parties are to have time to write briefs that will be of any value, and if they are to have the right of presenting oral argument, which they will probably insist is involved in the " full hearing," from the language of the statute, I do not think that two months is sufficient time in which to do these matters. If the policy of Congress would be that the commission would hear the testimony and confer among themselves about it, without having to take it up carefully afterwards and consider it and make any report about it and hear oral arguments and hear briefs, we could, perhaps, sit down and hear testimony in a general way with respect to these great controversies, and hear the oral arguments, such as lawyers could make upon that sort of hearing of testimony, and reach some general conclusion, and state it, and deal with it in that way. The Chairman. May I make this suggestion : We are all lawyers — I think I have that title, anyhow; I speak for myself in this last respect — and we know that it is not possible in the due administration of justice to determine great cases, after having had hearings and arguments, within four months' time. But would it be practicable if we should give to the commission power to suspend a rate for four months and then the further power at the end of four months within their discretion to make a further suspension of the rate until they had determined the merits of the case, it being possible within four months' time to ascertain whether there were any meritorious propo- sitions involved? Would it? Mr. Clements. I should think a provision could be framed upon that line so as to make it practicable. The Chairman. Of course it is easy enough to make a law. but the question is. Would it work ? Mr. Cleiments. I think that would work. The commission could tell at the end of four months whether it was necessary to extend the time or not, if it had reached the conclusion at that time that there was no merit in the case, and without taking time to write it up and make a report upon it in all of its features they might say, " There is no use to extend this time." In that way yon could elimi- nate all cases except those in which it was made to appear that there was probable cause for complaint and necessity for further time to fully investigate it and make a conclusion in the case, which the com- BILLS AFFECTING INTBKSTATB COMMEECE. 1267 mission would not do if it was demonstrated that there was probably merit in it. The Chairman. In your opinion, would it seem quite logical for us to give to the commission power to suspend a proposed rate for the purpose of having a determination of the matter before the rate went into effect, and then in the middle of the consideration of the case, at the end of four months' time, permit the rate to go into effect without a determination of the merits of the proposition? Mr. Clements. It seems to me that would not help the situation any in a case where it would be necessary to do that. It might just as well have gone into effect in the first instance as at the end of two months. And one very strong argument, which I think must appeal to anyone in behalf of some provision of this sort, is well illustrated in these lumber cases. In tjfiese Northwestern lumber cases, where some of the large shippers went into court and got an injunction against the collection of the increased rates, they put up a bond — a number of them did — out there, aggregating as much as two and one- half million dollars, to pay back whatever of the increased rate was justified by the commission and the finding of the court. At the end of eleven months they were to have an accounting in the court out there, and did have it, and it appeared after the end of eleven months in court that those parties to that injunction proceeding would have been liable to have paid $1,250,000 on their shipments in eleven months if the full advance had gone into effect. As it was, at the end of that period, under the injunction and accounting in court, they were found to be liable for about $350,000. That illustrates that in that time there would have been paid back a million and a quarter, nearly, and that did not cover all the shipments in that country there. But, on the other hand, it did show that, according to the decision of the commission, if it was correct, the carriers would have been deprived of about $300,000 or something over if they had not been protected in some way. They were in this case under a bond. In the southern pine cases, where the rate Avas not enjoined, it went on for about four years before the controversy was finally settled under the old procedure by the Supreme Court. The higher rate on 200 pounds was dissolved, and it resulted in reparation claims for $3,000,000 or $4,000,000, and they have since then been in process of adjustment. The roads established a clearing house in New York, and one in Macon, Ga., and one here in Washington, to check up what reparation was due on these hundreds of thousands of ship- ments in those three or four years, and then they made some sort of a compromise. It was nearly impossible to settle it except in that way. They had to find out to whom the money was due ; who was the actual shipper. Sometimes it was claimed by the consignor and sometimes it was claimed by the consignee. They had to find out what proportions were to be paid. The commission had all this testimony, but they had not any way by which to prove their claims except to call for the records of the railroads, and they have had this going on at great expense for three years nearly— betAveen two and three years — and the ultimate outcome as estimated will be, as an adjustment of these matters, that the roads will get back something like a million and a half dollars. 1268 ^ BILLS AFFECTING INTERSTATE COMMERCE. The shippers are accepting about 67 per cent of the face value of what would be their claims, as can be best estimated from such rec- ords as they have, without interest. I think they have done a wise thing, because of the great difficulty of making the proof in those cases and the great length of time it would take to follow up these shipments and bills of lading and ascertain the weights and every- thing incident to them. It illustrates the great confusion which comes both to the railroad and to the shipper when money has to be paid back. The Chaieman. Of course, the ultimate consumer does not get any benefit from it anyhow. Mr. Sims. In order that the commission may do absolute justice in each case, why should they not have the discretionary power to sus- pend the rate until they could find out the facts, in order to do abso- lute justice? Mr. Clements. That seems to be the most practicable thing and approaches more nearly what would be a just thing to do, because in nearly all of these cases it must be remembered that the rate which was advanced was a rate which the railroads themselves have made and which was in effect for years, and it is simply holding in statu quo a situation which they themselves have voluntarily created and have been apparently satisfied with for a long period of time. It is not a hardship to say, "If you have established these rates yourselves and have been content with them and have done your business under them, and you want more now and propose to get it by an advance of rate, the matter should be held in statu quo until a reason could be shown for it." Mr. Kennedy. Judge, I would like to call your attention to the words " after full hearing." Has the contention of the attorneys been in these hearings that they have not been fully heard, and does that phrase protract the hearing of the cases? Mr. Clements. We have always, so far, been able to give them a hearing, with the taking of testimony, and the filing of briefs, and the giving of oral argument in such a way that they have been con- tent with it, and content to let it alone, at least. ' Of course we can not give all the time for oral arguments that they would have taken. We have to limit that in almost every case. Mr. Kennedy. It occurs to me it would be well to strike out the word " full " and let the commission determine when they have heard enough. A little discretion like that would perhaps expedite these hearings. Mr. Clements. That might perhaps remove the possibility of a con- troversy. I refer to the language of the statute, not that there has been a claim made in any case that we ha'^^e not given them a full hearing. We have had to limit the oral argument in most cases, but they have accepted it. All the courts do that, and there has been no real contest that we had denied them of any legal right. But if we had to act in such a manner that we would take written testimony and not wait until it could be written up and briefs could be made, I do not know but that they could say that was not a full hearing at law. Mr. Kennedy. Don't you think the taking out of that word would give you the right to conclude the hearing when you felt sure you had heard enough? BILLS AFFECTING INTERSTATE COMMEKCE. 1269 Mr. Clements. It would remove possible contention in some future case. Mr. Stevens. Might it not be, Judge, that under the doctrine laid down by the Supreme Court that only jurisdictional and constitu- tional matters can be contested — might it not be on a jurisdictional matter that they had not had a full hearing ? Might not some of the parties contend before the court, whatever court would have jurisdic- tion of your orders that had been contested, that the hearing had not been a full hearing, and therefore assail your whole jurisdiction under the other language? Mr. Ci.ements. Yes ; that is what I referred to a moment ago. If we had to do this in sixty days, and we could not hear it in what would be the ordinary way, there might arise a question of that sort. The Chairman. We put that in there, according to my notion, for this reason : We did not wish the commission, in disposing of one case, to assume that it had learned all that there was to be known on the subject in connection with a similar case, because it had heard and disposed of that one case, which would be the tendency of every administrative body. Mr. Clements. Yes. Mr. TowNSEND. You have no trouble about this now, do you. Judge ? Mr. Clements. No, sir ; not on these words so far. The Chairman. I want to ask you another thing, and that is as to the proposition of appeals by shippers. Would it be practicable or beneficial or injurious, in your judgment, if we should confer upon shippers the power to appeal to the courts for the determination of the law where the commission could throw the claim of the shipper but of court on legal grounds and not upon questions of fact ? Mr. Clements. Well, I have frequently thought that it was very plausible on the part of the shipper to say that he is not satisfied with what the commission has done and that he ought to have the right to appeal, and as a member of the commission I would be awfully glad if he could have the right to appeal if there was some way in which it would be practicable. But since the Supreme Court has said that the making of a future rate is a legislative act, how can you confer upon any court the power to review it and substitute its judg- ment for that of the commission, any more than you could have the judgment of the court substituted for that of the judgment of Con- gress as to the, propriety of the legislation? The Chairman. Of course that goes without saying. You can not, and I have not seen any method yet by which you can get an appeal. But it has been urged very strongly here that where the commission decides a question of fact and then decides upon the facts, and under its construction of the law it has no power to grant relief as a legal proposition there might be some way of having the courts construe the legal proposition. Mr. Clements. I suppose there might be some certification of that sort or proAQsion of law put to a court that would review a question of law and instruct the commission to proceed, or indicate to it some other construction of law. I suppose such a machinery as that is possible. to 1270 BILLS ATFECTING INTERSTATE COMMERCE. The Chairman. I think there is some machinery of that sort under the English statute. I am not sure what it is. ; Mr. TowNSEND. Do you knoAV of any cases where that would have been employed by the shipper if he had had the right ? Mr. Clements. I could not say I have knowledge of any except in one case. I think we have a very peculiar case pending in court now, and that is where a shipper has filed a bill in the circuit court to compel the commission to award reparation on a large number of shipments in which the shipper had claimed reparation and which we had refused, and he has undertaken to do something which is equivalent to mandamusing the commission and seeking to compel it to go ahead and let it be done upon the complaint that we had not done the proper thing. That is the only case where I could point that that course would probably have been taken if it had been open to the shipper. Of course, some of the shippers have been very much dissatisfied with some of our decisions. That particular case is where, on hard-wood shipments of lumber, we allowed reparation and con- demned the advanced rate; allowed reparation back to the time the complaint was filed. But we did not go back to the full limit or statutory period and allow reparation for that whole period. Mr. TowNSEND. Is any constitutional right violated now by the shipper or the carrier ? Do you know of any way that he can go into court and have that determined? You do not know of any possible way in which he can get into court except when there is a violation of a constitutional right? Mr. Clements. I do not know of any way unless it might be on a question of a claim for reparation, if he chooses to come before the commission instead of going into court for it ; and in the Abilene case the Supreme Court held that he can not go into court when the rate itself is involved until it has been determined under the ruling of the commission. The Chairman. Under the old law the shipper could come into court or might sue the railroad company in any court? Mr. Clements. Yes. That was according to the apparent lan- guage of the law. The Chairman. According as the court determined whether the rate charged by the company was reasonable or not; but under the existing law the shipper can not go into court and have the court determine whether the rate that he is charged is reasonable or not. He must come into your commission, as I understand it ? Mr. Clements. I understand that to be the present law and the decision of the Supreme Court. The Chairman. Is there any other question that any gentleman would like to ask? ' Mr. Richardson. There are some questions I would like to ask the judge about the opinions he has been giving in the last few minutes concerning the suspension of the rate. As I understand, the law now is, under the Hepburn law, that the common carrier has got to give thirty days' notice of any proposed change in its schedules, one or more, and the commission has no authority to suspend that rate or any other rate except when a complaint is made by some one and the commission declares it to be unreasonable. This is additional au- thority that this bill gives the commission, if it becomes a law, to suspend the rate. Now, do you believe that it is a good policy to BILLS AJ?PECTING INTERSTATE COMMEECE. 1271 take from the common carriers of the country the power and right to initiate rates? Mr. Clements. Well, I think it is certainly a reasonable thing to do to them, and a necessary thing to do in behalf of the piiblic — to hold in abeyance that increase of rate until its reasonableness can be settled. I do not quite agree that that is initiating the rate. It is simply holding that rate then made in statu quo, and when they ask to increase it asking for the reason for it. Mr. KiCHAEDSON. That is what I wanted to get information from you about. Is not that in effect practically giving to the Interstate Commerce Commission the atithority to initiate rates, because all of the rates that railroads adopt or agree upon or file with the com- mission would be or should be sooner or later subject to that rule or power of the commission to suspend it for the time being ? Mr. Clements. Xot any more so than you authorize the commis- sion now upon complaint and hearing to authorize the future rate. That goes on from time to time now. I do not understand that the holding in abeyance of a proposed increase is any more the fixing of a judicial rate upon the carrier than upon the hearing to condemn the existing rate and prescribe a lower rate. Mr. RiCHAEDSON. You do not contend, when the railroads can not initiate a rate without the approval of the commission, that this is giving the railroads the power to initiate the rate ? Mr. Clements. They have the power to initiate all the rates now. Mr. Richardson. That is modified now, as I understand it, by the power given to this commission to suspend the rate. Mr. Clements. Well, I think the suspension in this case is simply to hold things where they are until you find out what ought to be done. Mr. EiCHARDSON. Now, I want to ask you another question: Do you believe that the physical valuation of the railroad presents a fair and reasonable criterion by which to regulate rates? Mr. Clements. I think it would greatly help any tribunal dealing with rate questions to judge properly by. It would be a material help, but it would not be the sole consideration. It would not be as controlling ordinarily as it would be when you get into one of these controversies in court. When you get into court the first thing that is alleged is that this property is worth so much, and that it owes so much in bonds, and that it takes 65 or 70 per cent of its gross earn- ings to pay the operating expenses, and it has so much more to pay as taxes, and so much more for the interest on the bonds, and there is but little left to the stockholders, and therefore an appeal is made to the court for an injunction against the reduction of the rate. And right there, immediately,* whoever -does that must pass upon that question, and must begin to look to the value of the property. The Supreme Court has said that they may earn a fair value on the in- vestment. Now, what is the investment ? The Chairman. Judge, will it be satisfactory to you to return at 2 o'clock this afternoon ? Mr. Clements. Yes. , , , , j. ., -j.^. The Chairman. I think several of the members o± the committee desire to interrogate you further. 1272 BILLS AFFECTING INTERSTATE COMMEECE. Then, without objection, we will take a recess until 2 o'clock this afternoon. (Thereupon, at 11.55 o'clock a. m., a recess was taken until 2 o'clock p. m.) AFTERNOON SESSION. Pursuant to recess taken, the committee reassembled at 2 o'clock p. m., Hon. Irving P. Wanger in the chair. Mr. Wanger. Mr. Reporter, here is the brief of Mr. Bentley W. Warren, attorney for the Boston and Northern Street Eailway Com- pany and the Old Colony Street Railway Company, for printing in the record : Street Railways and Intrhstate Cdmmerck. Street rnilicriyn should not he included among the transportatUm iiijeticiex subject to tlic net of Congress to regulate commerce, approved February .'/, 1887, as amended. At the outset of any discussion of this proi>osition it is necessary to define what is meant by a street railway. In Massachusetts our statutes distinguish three different classes of railroads: (a) The ordinary railroad, (6) the street railway, and (c) the electric railroad. The statute definitions are as follows : " Railroad " means a railroad or railway of the class usually operated by steam power. " Railroad corporation " means the corporation which lays out, constructs, maintains, or operates a railroad of the class usually operated by steam power. " Street railway " or " railway " means a railroad or railway, including poles, wires, or other appliances and equipment connected therewith, of the class op- erated by motive power other than steam, and usually constructed upon the public ways and places. An electric railroad is " a railroad or railway * * * of the class oper- ated by electricity or by any power other than steam * * * and constructed wholly upon private land purchased or taken by said company under the provi- sions of this act; or constructed partly upon such private land so purchased or so taken by said company and partly upon public ways and places, but at least one-half of which is constructed upon such private land." The electric railroad in Massachusetts, as defined above, is, as respects the powers and liabilities of the corporation operating it, for many purposes a railroad operated by electricity. The test laid down in Massachusetts statutes for recognizing a street rail- way, viz, a railway usually construoted upon the public ways and places, is one approved by experience, and will be found, upon investigation, to be consistent with practical considerations. The purpose of such railways is essentially different from the purpose either of commercial railroads or of electric rail- roads. A street railway is designed to meet local need for short-distance transporta- tion. It represents merely an improved use of the streets and highways them- selves. Its accommodation of the public is confined almost entirely to carrying from one point to another point in a public highway passengers who, but for the street railway, would either be compelled to walk or drive between the same points. It receives and discharges its passengers within the limits of the highway, stopping for both purposes at frequent intervals. A street railway either performs no business in the carriage of goods and merchandise, or when It does perform such carriage, does so in an incidental and quite suboi-dinate way to its primary function of the transportation of passengers. Such carriage of goods as is either done or is capable of being done upon a street railway Is strictly analogous not to the freight business of railroads, but to the light teaming performed in cities and towns by teamsters and by local trucksters, or. as they are called in Massachusetts, city or suburban expressmen. Business of this sort done upon street railways would otherwise be done with wagons upon, the highways, and not by freight cars upon the regular railroads. BILLS AFFECTING INTERSTATE COMMEBCE. 1273 Not only is the kind of business done upon street railways so different from that done upon railroads as to make the application of interstate-commerce regulations to the former unnecessary, but the physical differences between the two classes of carriers render impossible such a relation between them as can ever raise street railways to sufficient importance to justify the application to them of federal control. It is not practical to operate over the ordinary street railway standard railroad cars. The requirements of ordinary highway traffic Involve the use of the same portions of the street both by street railway cars and other vehicles. This necessitates as a result the use of special kinds of rails. The flange of the standard railroad car wheel is too deep to run upon the tram rail of the street railway. Both the tread and flange of the standard car wheel are too broad and heavy to be run upon the ordinary grooved rail which is so generally pre- scribed by municipal authorities for the use of street railways. The " special work " of street railways — that is, the curves and switches — are particularly unfit for the use of either standard passenger or freight cars. The grades of the ordinary street railway, following as such railways usually do the grades of the highways in which they are built, are not adapted for hauling the heavy cars usual upon commercial railroads. In all these respects street railways differ essentially from the so-called interurban electric railways which are now becoming common in some parts of the United States. These interurban railways are, as pointed out by Mr. Lin- coln (p. 465 of the report of the hearings before the Interstate Commerce Committee), practically railroads operated by electricity. There may be good reasons for including such interurban railways within the federal legislation to regulate Interstate commerce; Indeed, there Is probably no good reason for not so including them. The construction of their tracks and road bed, the character of their rolling stock equipment, both passenger and freight, the extent of their lines, the sort of business they aim to do, are all similar to the corresponding features on the ordinary railroads. The difference in motive power is inci- dental and not essential. Even the name " interurban " applied to such rail- ways is almost misleading. Such a line as the projected one mentioned by Mr. Lincoln, from St. Louis to Kansas City, is " Interurban " only in the sense that the Boston and Albany Railroad is interurban, in that Its termini are in two cities. The distinction between these so-called interurban electric railways, which are really railroads operated by electricity, and the ordinary street railway Is almost a"s marked as that between the street-railway system in New York City and the New York Central Railroad or the Pennsylvania Railroad. Unfor- tunately, statistics are not available to show what proportion of the 38,000 miles of electric lines referred to by Mr. Esch (at page 466 of the record of hearings before the committee) represents electric railroads and what propor- tion represents ordinary street railways. When we remember, however, that the little State of Massachusetts alone contains over 2,800 miles of the 38,000 in the whole country and that all of those 2,800 miles are used In conducting strictly a street railway business, it is apparent that much the larger part of the 38,000 miles in the "whole country are probably similarly employed. STREET RAILWAY SITUATION IN MASSACHUSETTS. Eighty-one street railway companies reported to the Massachusetts Railroad Commissioners for the last fiscal year. Fifty-nine of these companies were operating their own railways. The total mileage operated was 2,869 miles, of which all but 250 miles were located, maintained, and operated In the public highways While the statutes of Massachusetts, as previously pointed out, have provided for the construction of electric railroads, no railroad of that kind has yet been built In the State. The freight business done upon the Massachusetts street railways Is so insignificant as to be negligible. The 81 companies earned in the aggregate In the year 1909, $31,956,007 from the fol- lowing sources: Revenue from passengers, $30,943,994; revenue from mails and merchandise, $297.816 ; revenue from tolls and advertising, etc., $/14,197. Bearing in mind that the primary object for the federal regulation of inter- state commerce was to eliminate abuses and Introduce uniformity in the trans- Dortation of merchandise, there Is surely little reason to load down the Inter- state Commerce Commission with the oversight of the Massachusetts street railways. The figures show that all these companies in Massachusetts derive 23738— PT 22—10 3 1274 BILLS AJ'FECTING INTEKSTATB COMMERCE. less than 1 per cent of their entire earnings in the transportation both of mails and merchandise. Their receipts from that source were actually less than half what they were from miscellaneous items of tolls, from advertising in the cars, etc. It is confidently submitted that the negligible amount of freight business done by the street railways in Massachusetts is undoubtedly true of similar street railways elsewhere ; that is, street railways in other parts of the country con- structed as are those in Massachusetts — chiefly in the highways. The total number of companies — street, suburban, and interurban — based upon the pro- posed census report on street and interurban railways, is 1,236, and their total miles of track, measured as single track, is 34,404 miles. The total number of passenger cars is 70,016, and of all other kinds of cars, 13,625. Their total earnings from operation are $418,187,858. Their total par value of outstanding capital stock is $2,097,708,856, and their total outstanding funded debt, $1,677,063,240. Their total net capitalization, based upon the same source of information, is $3,400,107,899, giving a net capitalization per mile of track of $100,495. That these capitalization figures are probably much in excess of the actual investment in the companies is apparent from the net capitalization per mile of track for the whole country of $100,495. In Massachusetts, where the Issue of securities by street-railway companies is strictly supervised, the amount of the capital stock at the end of the last fiscal year was $80,738,880, and the net debt was $75,939,932, making a total capitalization of $156,668,812, and the net capitalization per mile of track in Massachusetts is only $54,607, or only a little more than half that for the country as a whole. The number of companies — street, urban, and interurban — in the so-called " Red Book, American Street Railway Investments, Edition of 1909," greatly exceeds the number given above, as based on the proposed census report. The Red Book list shows 1,603 operating companies, and 603 underlying or controlled companies ; total of 2,206. The following table shows, both on the basis of the proposed census report and on the basis of the Red Book data, the small size and comparative unimportance of the average street railway (including also in the computation the interurban railways) in the United States: Statistics of the average street, suiurj)an, and interurian railway. On basis of proposed cen- sus. On basis of number of companies listed in Bed Book. Miles of single track Number of passenger cars ' Number of other cars Earnings from operation . Authorized capital stock . Authorized bonds 27.8 66.6 11.02 S338, 339. 69 «2, 029, 170. 17 81,876,392.26 15.6 31.7 6.1 S189,568.38 $1,136,823.99 81,051,321.04 EFFECT ON INTERSTATE COMMEBCE COMMISSION. Senator Cullom, in reporting the original act to regulate interstate commerce, said, in explanation of its scope : " The bill is not intended to affect the stagecoach, the street railway, the telegraph lines, the canal boat, or the vessel employed in the inland or coasting trade, even though they may be engaged in interstate commerce, as it would do if it was made to apply to all common carriers ehgaged in interstate conimercc. because it is not deemed necessary or practicable to cover such a multitude of subjects." What Senator Cullom said, looking to the future, as to the lack of necessity and the impracticability of covering such a multitude of subjects, is amply justified by the actual situation now existing. The effect of adding to the reports which the law already requires to be made to the Interstate Commerce Commission, reports of street railway companies from the number of 1236 up to, possibly, 2,206, of an average importance no greater than shown in the schedule above, must be apparent. The Interstate Commerce Commission has itself twice requested Congress to relieve it from the duty of supervising street- railway service in the District of Columbia, a duty imposed upon the commls- BILLS AFFECTING INTERSTATE COMMERCE. 1275 8ion by special act. Is anything to be gained by adding to the already heavy duties and responsibilities of that commission the supervision of this vast number of companes, engaged for the most part in conducting a purely local business, confined, so far as the Massachusetts figures show, as to over 99 per cent of Its volume, to the carriage of passengers, and already in almost every htate satisfactorily and thoroughly supervised and regulated by local tribunals «^^ly , accessible to the public affected and familiar with the needs of that Notwithstanding the explicit language of Senator Cullom in reporting the original act to regulate commerce, the Interstate Commerce Commission has twice held that the language of that act included street railways. (Willson v. Rock Creek Ry. Co., 7 I. C. C. Rep., 83 ; West End Improvement Club v. Omaha and Council Bluffs Ky. and Bridge Co. et al., 17 I. C. C. Rep., 239.) In the last-cited case, however, Commissioners Prouty, Knapp, and Cockrell concurred in the decision only on the ground of the decision in the earlier case, Mr. Commissioner Prouty saying on this point— " In Willson v. Bock Creek Railway Co. (7 I. C. C. Rep., 83) I expressed the opinion that the act to regulate commerce did not apply to ordinary street rail- ways. I still entertain the same opinion, but a majority of the commission thought otherwise in that case, and for the twelve years since we have uni- formly adhered to that holding. It seems to me that this should be accepted as the settled law for this body until reversed by a majoritv of the commission or disapproved by a court of competent jurisdiction. I therefore concur in the disposition of the case. Knapp, chairman, and Cockrell, commissioner, instruct me to say that they also doubt upon the point of jurisdiction, but concur for the reason above stated." ' If the commissioners were right in holding that the present act applies to street railway companies, the question may be asked whether it does not apply only to such as are, in fact, engaged in interstate commerce, and whether, therefore, the vast majority of such companies would not still be solely subject to local regulation and control. In Massachusetts, for example, there are oniy about 15 points where a street railway either crosses the boundaries between Massachu- setts and any one of the 5 neighboring States, or connects at the boundary lines with street railways operating in the neighboring States. To one unfamiliar with the decisions of the Interstate Commerce Commission and of the courts It would seem that the federal jurisdiction would apply only in these 3-5 instances, and that the great majority of the 81 street railway companies in Massachu- setts would still remain subject only to the jurisdiction of the Massachusetts laws and tribunals. Such, however, is not the fact. Although the Massachusetts street railways engage to such a slight extent in the carriage of merchandise, their receipts from that source being only 1 per cent of their total receipts, nearly every company does, for the convenience of its patrons, engage somewhat in transporting small packages of merchandise. Not infrequently such packages are carried on the front platform of an ordinary passenger car. If one such package is shipped from a point without Massachu- setts by a street railway, or, for that matter, by railroads or by one of the large express companies, destined for delivery to a consignee upon the line of a local street railway in Massachusetts, no part of which may be within 20 miles of the state boundary, that local company is engaged in interstate com- merce. The eases seem to be clear on this point, and the only method of taking such companies out of the jurisdiction of the Interstate Commerce Commission, and relieving that commission, already overburdened with more important busi- ness, from the necessity of supervising the accounts, the accidents, the safety appliances, the hours of employees, and the charges of the company must be either a declaration by Congress that legislation is not to include such coni- panies, or a decision by the United States courts that such companies are not included, as Senator Cullom evidently believed they were not, within the terms used in the federal acts to regulate interstate commerce. In Leonard v. Kansas City, etc., Railway Company et al (13 I. C. C. Rep., 573) the commission, after reviewing all the authorities, held that any carrier, even though its operations are wholly confined to a particulEir State, becomes subject to the regulating power of commerce if it engages in the slightest degree In the transportation of passengers or property destined from or to points without the State, and that since the Hepburn amendment of June 29, 1906, such a carrier is liable to the federal regulation, although the carriage 1276 BILLS AFFECTING INTERSTATE COMMEKOE. Is not done In a particular case under any common control, management, or arrangement for a continuous carriage. In The Daniel Ball (10 Wall., 557), a leading case on the subject, the Supreme Court said: " The fact that several different and independent agencies are employed in transporting the commodity, some acting entirely in one State and some acting through two or more States, does in no respect affect the character of the trans- action." (See also Rhodes v. Iowa, 170 TJ. S., 412; U. S. v. Colorado North- western R. E. Co., 157 Fed. Rep., 321; Same v. Same, 157 Fed. Rep., 342.) In the last-cited case the circuit court of appeals for Colorado held that a nar- row-gauge railroad was subject to the penalties Imposed by the safety-appliance acts, although it operated only a short line wholly within the State of Colorado, and transported goods only for an independent express company, the court holding, at pages 343 and 344 : " The railroad company did not receive, issue a bill of lading for, handle, or deliver the package, except as it received it in its car and carried it for the express company in conformity to the practice which has been described. * * * The transportation by a common carrier by railroad of articles of interstate commerce for an Independent express company is engaging in interstate com- merce by railroad as effectually as their carriage by it for the vendors or con- signors." I have said nothing about the probable conflict between the state laws and regulations and federal laws and regulations. That such a conflict exists and will result in unavoidable confusion and dissatisfaction in many of the States is undeniable. This is peculiarly true of States like Massachusetts, which supervise their street railways very strictly and subject them not only to minute control by state oflicials, but also in many respects, noticeably in the matter of engaging in the transportation of merchandise, to the control and supervision of city and town officials. If good reason exists for federal control of these local street railways, the objection that this conflict will exist is not entitled to weight. If, on the other hand, there are not strong reasons for extending or continuing the jurisdiction of the Interstate Commerce Com- mission over such street railways, this objection, it is submitted, should in- fluence Congress against including them within that jurisdiction. If the interests of the traveling and shipping public of the nation so require, the de- sires, preferences, and opinions of the citizens of Massachusetts respecting the use of their highways and the transportation of persons from one point to another on those highways and the sort of agencies which may engage in such transportation and the extent to which they may so engage not only must but should yield to the national necessity. If the necessity exists, the views of Massachusetts respecting the use of its highways, although those views are crystalized in legislation running back for two centuries or more, must be modified. Before Massachusetts, however, is called upon to submit to this federal interference with the control of its highways and the uses to which they may be put, the people have the right to ask Congress seriously to consider whether the necessity has arisen or is likely to arise. It is espectfully submitted that the bill Introduced by Mr. Townsend (H. K. 17536), now under consideration by the Committee on Interstate and Foreign Commerce, should, if enacted, contain a provision subsequential to the following effect : " The terms ' railroad corporation,' ' common carrier,' ' carrier,' and ' trans- portation company ' as used in an act to regulate commerce, approved Febru- ary 4, 1887, as amended ; an act to promote the safety of employees and trav- elers upon railroads, approved March 2, 1898, as amended; an act requiring common carriers engaged in interstate commerce to make full reports of all accidents to the Interstate Commerce Commission, approved March 3, 1901; an act concerning carriers engaged In interstate commerce and their employees, approved June 1, 1898 ; an act to promote the safety of employees on railroads, approved March 30, 1908; an act to promote the safe transportation in inter- state commerce of explosives and other dangerous articles, approved May 30, ] 908 ; and in this act shall not apply to nor include a street, suburban, or inter- urban railway corporation owning and operating a railway of the class oper- ated by electricity or by any motive power other than steam and constructed for at least one-half Its length upon public highways and places, and the word ' railroad ' as used in any of said acts and amendments thereof shall not ap- ply to nor include a railway of the class herein referred to." BILLS AFFECTING INTERSTATE COMMEBCB. 1277 II. // there is svffloient reason to include street railways within the act to regur late commerce, they should not he denied any of the benefits of that legislation. Although the freight business done upon street railways is, it is believed, negligible, always keeping in mind the distinction between street railways which are operated on highways and interurban railways, which are railroads operated by electricity, these street railways and such persons as may ship merchandise over them should not be denied the benefits intended to be con- ferred by section 9 of H. R. 17536. That section now contains the following exception : " The commission shall not, however, establish any through route, classifica- tion, or rate between street, suburban, or interurban electric passenger railways and railroads of a different character." (Page 18, lines 20-23.) If any good reason exists for this exception, it must be that the business done upon these railways is so different from that done upon railroads of a different character as to make the law applicable to the latter inappiicable to the former. If, however, such railways are to be included within the act, and Congress is thereby to adjudge that the interests of the traveling and shipping public require them to be included. Congress should see to it that that public is enabled to utilize to the fullest extent such facilities as are or may be, under federal regulations, furnished by the street railways. If the street railways and their business are to be wrested from their primary purpose of the local transportation of passengers, and, to a very limited extent, of merchandise, and brought under federal control, that control should be made effective. If there is any public demand for that federal control of street railways, and the demand is to be adequately met by legislation, the power to exercise the control should be placed In the hands of federal authorities, and not made dependent upon the voluntary act of the " railroads of a different character." It is respectfully submitted that section 9 contains among its provisions the chief reason and justification for any federal regulation of interstate commerce. If that reason and justification apply to street railways, the provisions of the section should be equally operative, both for them and against them, as for and against rail- roads or any other class of carriers. It is therefore respectfully submitted that the exception quoted above, and appearing in section 9, should oe ouiitted from the bill. III. // street railways are to 6e included or continued under the ] a rh diction of the Interstate Commerce Commission and the several acts of Congress to regu- late commerce, it is submitted that they should 6e excepted from the provisions of section IS, as they already are from the provisions of section 12, in the bill under consideration, E. R. 1756. Without the exception contained in the proviso of section 12 (lines 15-18, p. 26) an intolerable situation would be produced, certainly In Massachu- setts, and probably in many other States. As already pointed ont, nnder the decisions of the federal courts practically all the street railways are, although to a very slight extent, engaged in interstate commerce. Section 12, without the proviso, would prevent the consolidation of two or more such companies in Massachusetts, for example, although such consolidations are authorized under the general laws of that State. Without the proviso the parties to any such proposed consolidation would, to protect themselves against the penalties of the acts to regulate commerce, be forced, although they had complied with all the requirements of the laws of Massachusetts, to apply to the proposed court of commerce and to submit to the delay and expense involved in such an applica- The public policy of Massachusetts, as must be well known to the Massa- chusetts members of the Committee on Interstate and Foreign Comnierce, has long favored, first by special acts and now for more than twelve years by general acts, the merger and consolidation of street railways. This policy has resulted' to the general satisfaction of the public and in greatly improved service and lessened charges for transportation. Experience has shown that it Is far better to have one operating company in a city like Boston, or Worces- ter or Springfield, than several struggling and competing companies. The con- solidation of the small companies has been uniformly encouraged in Massa- 1278 BILLS AFFECTING INTERSTATE COMMEKOE. chusetts, subject to the supervision of the railroad commissioners, who are re- quired to pass upon each proposed merger. The prohibition In section 13 of the proposed act against the Issue of stock and bonds will be similarly objectionable, unless the corporations operating- street railways, as that term Is defined in the Massachusetts laws, are ex- cepted from Its provisions. In the first place, the provisions of section 13 are entirely superfluous in many States, as, for example, Massachusetts and New York, where the issue of securities, whether stock or bonds, is carefully supervised and regulated. lii the second place, that section, unless street railways are excepted from its scope, will, on the one hand, greatly add to the business of the Interstate Commerce Commission, and, on the other hand, seriously delay the necessary financing of the needs of the street railway corporations. The committee probably does not appreciate the relative insignificance of the issues of stock and bonds by street railway companies. In the year 1906, the railroad commissioners of Massachusetts passed upon 15 separate applications of this sort, varying in amount from $20,000 for the smallest to $500,000 for the largest issue. In 1907 the same commissioners passed upon 25 applications, varying in amount from .$10,000 to $1,010,900, with a single exception, that of the Boston Elevated Company, which was authorized to issue $5,800,000. In 1908 the commissioners passed upon 12 applications, and in 1909 upon 11. Many of the Issues of stock by these companies are for the purpose of ex- change for the stock of other companies with which they are consolidating. In such cases, the amount of stock which can be issued Is regulated by the Massa- chusetts statutes, and must be approved by the Massachusetts railroad commis- sioners. All these cases would have to be taken before the Interstate Commerce Commission under section 13 of the bill, unless street railway companies are excepted from the provisions of that section. In the case of an issue of bonds it is quite usual to sell them at some dis- count. Many companies prefer to issue a bond at a low rate of interest, although at a discount, than at a higher rate of interest, in order to make the sale at par. All these issues would likewise have to be submitted to the Interstate Commerce Commission. When the committee recalls the fact that there are somewhere between 1,236 and 2,206 street, suburban, and Interurban railway corporations in the United States, they may be able to determine which of these alternatives the Interstate Commerce Commission will adopt — either to make the supervision of the pro- posed issue purely perfunctory, or subject the corporation and the public desir- ing the expenditure of the proposed capital to an indefinite delay. Certainly no one would expect that nine human beings, charged with the supervision and regulation of the Interstate commerce conducted upon 232,000 miles of steam railroads, would have much time or energy to pass upon the necessity or reasonableness of proposed stock and bond Issues by this great number of street railways. Bentley W. Wabben, Attorney for Boston and, Northern Htreet Raiheay Company and Old Colony Street Tiailway Company. Mr. Wangee. Now, Mr. Commissioner, will you proceed? STATEMENT OF HON. JUDSON C. GLEMENTS, MEMBEK OF THE INTERSTATE COMMERCE COMMISSION— Concluded. Mr. Clements. Mr. Chairman, at the time the committee ad- journed or took a recess, Judge Richardson, of Alabama, had asked a question in regard to the use of valuation in connection with this matter of determining rate questions, and I had answered in a gen- eral way that I thought valuation was a very pertinent matter in the inquiry as to whether rates fixed would yield, according to the regular rule of the court, a return fair to the investors in the prop- erty, having reference to the fair value of the investment. I think it is impossible for any conscientious judge, court, or commission to get entirely away from what the people who built a railroad have put BILLS AFFECTING INTERSTATE COMMBECE. 1279 into it, and what the property which they have built is fairly worth. From time to time, when you are confronted with the question and want to deal Avith it intelligently and conscientiously, you can not make its solution depend altogether on how much money was put into the road^ for that money might have been improvidently speiit. But a valuation of the property, the fair and reasonable value of it at the time, is a matter of great importance in considering the rea- sonableness of these rates from th^e standpoint of confiscation. Mr. Russell. Judge, should it be the value at the time of the valua- tion or at the time of the building of the road ? Mr. Clements. Well, that opens up the question of what you should consider. Of course, if you take into account the unearned increment and increased value of the terminal properties that were placed in there and secured thirty or forty or fifty years ago, and have been sur- rounded since that time by a great city, where the values have gone up, and if you add to that the difficulty and expense of procuring equal fa,cilities from private property owners or under condemnation pro- ceedings, where the city is built over the property that way, it would swell the value of that property a great deal. I hardly think it is a, sound or fair basis that the full amount of increased value by un- earned increment should be taken in the valuation. But it should be considered together with a lot of other elements in connection with the same question. Neither would I say, on the other hand, that those things ought to be altogether ignored. But in any event it will be found a helpful thing to any tribunal dealing with this kind of a problem to turn to what is the real value of the railroad, either when originally constructed or at the present time — either way, Of course it should not be final or conclusive, and it would not be the only con- sideration. In connection with that is the question of regulating securities. I would not for a moment be understood as advocating the prohibition in the law against the sale of stocks and bonds at less than their par or face value when you are entering upon the construction of a new road. Money must be obtained to build it. It may be that it can be obtained from the people who are to furnish it only by taking these securities on an uncertain basis, where they might have to wait ten years for the building up of the business before there would be any earnings at all. And I do not think it would be quite fair, and I think it would tend to hamper the development of railroads in the undeveloped parts of this country, to make any such conclusive rule as that. But, on the other hand, take a gilt-edged property 35 or 40 or 50 years old, like the Alton was a few years ago, paying 8 per cent annually to the stockholders, having a capitalization of all kinds of about $34,000,000. Then the majority of this stock was obtained by four men, and within a few years the capitalization was increased to $114,000,000, the bonds being sold to three or four men at 65 cents on the dollar, and they selling them to themselves, or taking them themselves. Some of those bonds turned up m a little while m one of the great New York life insurance companies which had paid 96 for them. They had a much greater value than that at which the promoters took these bonds over to themselves. The net outcome was that the road which for thirty-five years, under the management of Mr. Black- stone the president, had be'en paying 8 per cent and upward annually 1280 BILLS AFFECTING ISTTEBSTATE OOMMEKOJfi. to the stockholders, the value of the stock being away up beyond par and its credit being unexcelled by that of any road in the country, was capitalized at $114,000,000 instead of $34,000,000, and only $18,000,000 of that great overcapitalization was devoted to the im- provement of the property, while the remainder of the excess capital- ization was divided among themselves by the promoters. Mr. Black- stone stated in his last report before these transactions took place that he had, during the certain period of time he mentioned, perhaps twenty or twenty-five years, been able to reduce the freight rates nearly one-half what they had been, and had reduced the passenger rates as well as the freight rates. He stated that in his report, and I have no doubt in substance it was true. And yet the road was pay- ing more than 8 per cent dividends, and its credit was fine. When the reorganization was finished up, the road had a capitalization of $114,000,000 instead of $34,000,000, and the profits of that recapital- ization were absorbed by those promoters, first by issuing these bonds and taking them over to themselves at 65 cents on the dollar, and then disposing of a large quantity of them a little later at 96. As I say, only about $18,000,000 from this reorganization went back into the property for improvements, and the balance of it was left as a load upon the property, to be carried by this and future generations, in order to make good the interest and the fixed charges upon these obligations and the money that was put into the pockets of the promoters, who go off and build castle homes with it and proceed to add additional millions to those already obtained. Now, it is that kind of thing that ought to be controlled, I think, by statute for the sake of the good name of the American people, as well as for the protection of the minority stockholders and investors by trustees. How many times we have all seen people in the capacity of trustees looking out for the benefit of the widows and orphans for whom they are acting to get the best investments and safest invest- ments. They are always looking for something safe. When a fine property like this, which has become a splendid piece of property, is developed and maintained, it becomes a most attractive bait for pro- moters to secure a majority of the stock and load it down and en- danger its credit and endanger its abilitj^ to meet its obligations in the future and fix up a basis by which every time the rates are called in question they can go to the court and state what the fixed charges are — first, the operating expenses, and the taxes, and the money nec- essary to meet the interest on these obligations, which are binding upon the road. If you say they are water and illegal because the proceeds were not put into the road, and that the commission and the courts may ignore them, then what does the representative of the widow and orphan say ? They say : You stood by; you had uo law forblddiug this to be done; it has been done according to law, not in violation of the law ; and now will the public stand for a decision which will say that the whole thing may be disregarded when the law did not forbid it, and when to disregard it is to make worthless or reduce the value of these investments which the people ha^'e put their money into? I do not think the Congress or the courts or the people of this country as a whole would stand for any such result as that. Mr. Kennedy. The substance of it all is this: The people of this country have been represented at all times in the legislature, and the buyer of these watered stocks and bonds* is the innocent purchaser. BILLS AFFECTING INTEKSTATE COMMBBOE. 1281 under no obligation to look into those things, while the public is in no sense innocent. The public slept upon its rights while these things were doing, and the owner of the stocks and bonds stands higher now in equity than do the people? Mr. Clements. Well, I think, looking at it from the standpoint of natural justice and conscience, that is what the great body of the people would say — that if these things are to be the loss should not be borne by the few people who have innocently invested in them and owned them, inasmuch as the public has had the power ever since the Constitution was framed to regulate these matters. I am sorry Judge Eichardson is not present now, because he asked a question the other day indicating that in his opinion this was wholly irrelevant to the question of rates. The importance of this matter is seen when a controversy arises on rates made by a commission, whether state or federal, and there is an effort on the part of the car- riers to enjoin the enforcement of the rates. The first thing thai a good lawyer representing a railroad does is to show how much gross earnings are taken by the operating expenses — 65 or 70 per cent in most cases of the gross earnings go that way — and then taxes and other necessary claims upon the earnings, and then the interest neces- sary to meet these bond obligations and notes that have been put upon these roads. Then he is able to demonstrate that the amount available for payment of dividends on stocks is usually comparatively small. Then he has a clean-cut basis upon which to say, " When you reduce this rate, it does not leave enough for the stockholder and investor." And why ? Because it has been diminished by the money taken out of the earnings necessary to meet those obligations that have been put upon the property — not to build it and not to make it better and not for any legitimate carrying purpose, but simply to get a great fund to divide out amongst the promoters, who take it away as private gain. Mr. Washbuen. Well, Judge, if the Alton road was the only road, for example, operating between Chicago and St. Louis, I would be impressed by what you say, but there are perhaps half a dozen competing lines between those two points, and, that being so, how do the peculiar vicissitudes of the Alton affect the freight rates, for example, between Chicago and St. Louis, in view of the fact that there are so many competing lines between those points? Mr. Clements. All of them contend they should have substan- tially the same rate. As a matter of fact, the rate must be about the same. Mr. Washburn. That being so, the vicissitudes of that particular road would not have much to do or much effect upon the rate between the two points, would they? Mr. Clements. That depends upon whether all the rates between the two points are too high. Mr. Washbukn. In the absence of a poolinj>- arrangement competi- tion would naturally bring those rates down ? Mr. Clements. There is now the practice of agreeing upon rates between all important points. It is not an actual poohng of the freight, except as it may be distributed by the rates they impose. Mr. Washburn. You mean they are thinking now to have that practice recognized by this bill? Mr. Clements. Yes. 1282 BILLS AFFECTING INTEESTATE COMMEKCB. Mr. Russell. The fact that the other roads might follow the ex- ample of the Alton shows the necessity of such legislation, as illus- trated in the case of the Alton ? Mr. Clements. Yes. These bonds run from thirty to forty or fifty or sixty years, and the railroad has no way of getting earnings to pay fixed charges and get dividends except out of the people who pay rate charges. Of course they may refund from time to time and carry it along through a course of years, but ultimately it is an obli- gation that must be met some time, and it must be met out of earn- ings. It may be that the rates were too high when this thing was done, and there would have been an opportunity to reduce them not only on the Alton road, but also on the competing roads. I do not undertake to say whether they were or not. But Mr. Blackstone shows in his report that while tlie road had been for twenty-five years paying 8 per cent dividends, the freight rates were reduced one-half. Now it may be that he could have continued to do the same thing and that ultimately his road could have dropped rates still further. Mr. Washburn. That was not a voluntary act upon his part? I suppose the reduction of these rates was brought about very largely by competition? Mr. Clements. I suppose so. Mr. Staffoed. May I offer this observation ? The Alton road had been for years what was known as a " cutthroat " railroad, seeking to extend and enlarge its traffic by reason of lower rates, so as to com- mand its share of the total traffic between St. Louis and Chicago. Mr. Clements. Yes. That illustrates the very point I was talking about. Mr. Stafford. I thought that would emphasize the fact that when they would be prevented from higher capitalization and watering of stocks the competition between roads would thereby act as a means of leverage in lowering rates. Mr. Clements. Yes; undoubtedly. These cutthroat-rate wars are a disadvantage to the public in some respects. They are an incon- venience, but it can not be denied that through a long period of time they have had a forceful effect in bringing down the general level of rates to a point where normal conditions would allow business to be done on the lower rate. Mr. Russell. Judge, suppose the Interstate Commerce Commission should be clothed with the right to supervise the issuance of securi- ties by the transportation companies. How far would that conflict with the powers vested in the state commissioners to supervise the issuance of those securities? In Texas, you know, we have a state commission, and have had since 1894 or 1893. Under Governor Hogg's administration that state commission was clothed with the right to supervise the issuance of bonds and stocks of various kinds, and particularly of carrying corporations. How far would the power vested in the Interstate Commerce Commission conflict with that vested in the Texan commission? Mr. Clements. I do not know how far, Mr. Russell, the limitation proposed in these bills would in any way conflict with the Texas law with regard to railroads in Texas. I have not really investigated it to see if there would be any conflict at all. biujS ajtecting interstate commerce. 1283 Mr. EussELL. For instance, take the Missouri, Kansas and Texas Ea,ilway Company. It is domesticated now in our State. We re- quire the railroad companies operating in our State to take out state diarters. It is known as the Missouri, Kansas and Texas Eailway CoMipany until it strikes our border line, and then it becomes the Missouri, Kansas and Texas Eailway Company of Texas. Now, sup- pose the Texas railway commission should say that corporation can issue bonds to the extent of $60,000 per mile, and suppose the Inter- state Commerce Commission should say it should issue them only to the extent of $30,000 a mile. Would not the decision of the Interstate Commerce Commission control? Mr. Clements. I have not had time to work it out to see whether or not there would be an actual conflict, according to the scheme here, that the commission should certify as to the facts necessary there in order to authorize an issue of stocks and bonds. But I pre- sume that the law would operate in a way so as not to be in conflict with the state law. It would be permissive, and if it was a state charter and a state corporation it might be that it could not go be- yond the authority of the State. But I really confess that I have not undertaken to work that out and see whether it can be done with- out conflict or not. Mr. Washburn. Let ihe put this case to you: The New York, New Haven and Hartford is chartered under three States, the States of New York, Massachusetts, and Connecticut. They have been asked to do certain things in the way of the issuance of securities under the laws of the State of Connecticut which are forbidden under the laws of the State of Massachusetts. Don't you think if this act we are considering were enacted into a law all of the States whose laws were less strict than this national act would have to conform to the national act, and those States where the la\Vs are more exacting would still insist on enforcing their requirements? Mr. Clements. I thought if these laws were passed, they could be made to harmonize in that way, and then the State could impose such additional restrictions as might be found necessary or advisable beyond those imposed by the United States Government. Mr. Washburn. But no State could go beyond the restrictions re- quired by the National Government ? Mr. Clements. Yes; that may be illustrated, I think, by the situa- tion or the condition of court decisions before the interstate-commerce law was passed. At that time the question arose as to what was interstate and what was intrastate, and there is a line of decisions, I think, to the effect that where the Federal Government haying juris- diction of tiie matter has not exercised it, the state regulations would hold good and even apply to interstate business, but when the Federal Government did exercise it and went into that field, that was the rule. But I think the system of regulation can be made entirely harmonious upon the theory that the State may not authorize the issuance of stocks and bonds beyond what the Federal Government would re- strict it to. Within those terms it might pursue a different rule. Mr EussELL. Wherever there was any conflict, would not the fact that the Constitution says that the Constitution shall be the supreme law of the land control the state authorities and all? Mr. Clements. I think so. 1284 BILLS AFFECTING INTEBSTATE COMMEKUJfi. Mr. Stevens. Would it not be, Judge, that the effect of the act of Congress would be to restrict the authority? That is, we say this corporation can do business, providing it complies with certain condi- tions that we fix ? Mr. Clements. That is the theory in this bill, as I understand it. Mr. Stevens. While the State is the original authority, and the creator of these corporations, and fixes the conditions of their creation ? Mr. Clements. Yes; I think it can be worked out without any necessary conflict between these authorities, state and federal. But it must be remembered all the time that the provision in the Consti- tution of the United States conferring upon Congress the authority to control interstate commerce is unqualified and unconditional, and it was doubtless put there because it was seen during the existence of the old Confederation that it was impossible ; just as impossible to have 13 or 47 States and separate sovereigns regulating these mat- ters without conflict and injury to the whole as that they saw it was necessary to have one authority to fix import duties as well, instead of one State protecting its own industries against those of the other States. Otherwise there would be an eternal warfare, commercial and perhaps otherwise, and a few things, it was found, must be fixed by one government and not by 13 or 47, and this is one of them, con- ferred, doubtless, for the purpose of being exercised in the interest of the whole, so far as it relates to commerce among the States. Now, just one more illustration of a particular instance. I refer to it, as I have done on some occasions before, not for the purpose of pointing out one road as being any worse than another, but because facts, as we have often heard it said, speak louder than words, and what has happened heretofore may happen again, and doubtless will happen again under the present law. A few years ago Mr. John W. Gates had obtained a majority of the stock of the Louisville and Nash- ville Railroad, and when knowledge of that fact came suddenly to Mr. Morgan, who was largely interested in the Southern Railway, or whose house was interested in it or represented those who were, he obtained at- night an option from Mr. Gates, at his hotel in. New York, for the stock of the Louisville and Nashville. The hearing be- fore us indicated that Mr. Gates had begun to buy the stock at 108, its normal value at the time when he began buying it up, and the price went up and he finally paid perhaps an average of 125 or 130. He gave an option for it at 150 in sixty days. Within the sixty days Mr. Morgan had arranged with the Atlantic Coast Line management for the Atlantic Coast Line to take that Louisville and Nashville stock up, the majority of it at 150, the amount which Mr. Gates asked for it, and in order to do that the Atlantic Coast Line issued $35,000,000 of bonds and $15,000,000 of preferred stock, which was taken by the stockholders in that road, in that system ; and with that money, with those securities, they obtained enough money to buy this stock. Without doubt there were handsome profits to Mr. Gates, ranging from the price paid, from 108 up to 130, and the price received, 150, upon these millions, and doubtless also a good compensation to Mr. Morgan's house for making this arrangement ; but there was not, in consequence of it, a 10-penny nail or a car tie added to the property. That was not the purpose of the transaction. Mr. Morgan said they BILLS AFFECTING INTERSTATE COMMEECE. 1285 did it because they did not regard Mr. Gates as a suitable or proper maji to run the Louisville and Nashville Eailroad. The Chairman. Judge, there is a roll call progressing in the -House. Are you through with your statement? Mr. Clements. I was simply going to remark that that is an "^usti'ation of the necessity of controlling these matters. Mr. Russell. Mr. Chairman, I wanted to ask Judge Clements a question about the difficulty of obtaining the physical valuation of the railroad property. The Chairman. Go ahead, then. Mr. Clements. I do not think there is any practical difficulty about it. It will talce some time and some money, but it can be done without doubt. Now, Mr. Chairman, I do not wish to take the time of the com- mittee unless there are some questions which gentlemen may desire to ask. The Chairman. I think the committee will have to adjourn. There is a roll call in the House, and the Indian bill will come up right after that. It is understood that these hearings will end to-day. If anybody else desires to present any suggestions we would be glad to have him present the same in writing. Mr. Russell. Mr. Mann, you have not pursued the inquiry made before dinner as to the Judge's opinion of the long and short haul, and neither have I. I would like to have his opinion upon that proposition. The Chairman. Very well. He can give his opinion very briefly. Mr. Clements. We have expressed the views of the commission, and those are my views. That is, if there is to be a change of the language, "substantially similar circumstances and conditions," or if that language is to be stricken from the fourth section, I should say that, while there should be some good reason for relieving the carriers from it, there ought to be some allowance made for the custom that has grown up under the law and recent decisions of the courts, where to reverse that matter all at once would involve quite a shock to some other places that have been enjoying the advantage of a short-haul rate for a long haul. That would be true with respect to the Southeast in particular. The Chairman. You think that if that change is enacted into a law that it should not take effect for some time 1 Mr. Clements. Yes. Where the carriers can avail themselves of having the matter considered and be relieved of the rule, they should be allowed to present the matter to the commission, and the com- mission should have ample time to investigate the situation in those territories so as to exercise what new power it might have in that respect in a conservative way, so as to bring about such changes as ultimately will have to be brought about by slight degrees, rather than bring them about suddenly. Mr. Kennedy. You spoke of giving the commission discretion to control that matter. We would have to define what discretion we would give to the commission. Have you thought about what defini- tion would carry out substantially our public policy ? I believe that to allow a foreigner to have a discriminatory rate over our own rail- 1286 BILLS AFFECTING INTERSTATE COMMERCE. roads in the distribution of his products when we exclude our own people from that is revolutionary. It goes to the very fundamentals of the railroad service. Mr. Clements. Well, of course, on that point I think there is a very great misunderstanding which appears to have gotten into the newspaper prints as to what the chairman of this committee and Mr. Knapp, the chairman of our commission, said the other day — that conditions under the present law were intolerable. The Chairman. What was in the newspapers was not what was said in the committee, and it very seldom is. Mr. Clements. We must look to the other end of that question also, from the standpoint of the people who raise great crops of wheat and corn and grain and cotton in the interior, for which this Govern- ment is seeking to give them markets abroad as well as at home. It is regarded by many as a great advantage to this country at large that our manufacturers and farm producers of cotton and grain and all these things shall be able to get rates that shall put them into the open markets of the world in competition with other countries of production for the surplus produced in this country; and while, of course, the manufacturer in this country insists that these things of foreign production ought not to be hauled in this country at lower rates than the domestic rates, the producers of grain in the interior demand a low export rate in order that their products may compete with the markets of the world in the production of the world. I have not anything more to add to that than what the chairman of the commission said the other day. It is a great big question, and it runs directly into your tariff system. The commission said, in the old import case which has been referred to, that it modified the op- eration of the tariff law, and the Supreme Court practically said that was not a matter for the commission to consider; that it was a ques- tion of policy, for the legislative branch to consider. Mr. Kennedy. The language " under substantially similar circum- stances" took away from your commission all discretion to control that matter whatever? Mr. Clements. Yes. Mr. Kennedy. So that the railroads have practically been free to make any sort of arrangement for foreign shipments that they chose ? Mr. Clements. That is about what it amounted to. Mr. Kennedy. And in exercising that discretion they have given to the factories that chanced to be built outside of this country any sort of discrimination they please, without control ? Mr. Clements. Yes. But when you undertake to forbid it at all and then imdertake to qualify it, there is difficulty in fixing the rule of qualification. That is, they only seek to do it now, I suppose, in so far as is necessary to do it in order to permit these outside prod- ucts to come in in some reasonable volume. Now, if you should limit it and say they could not charge a certain percentage less than a domestic rate, that would not be of any value to them unless it was low enough to permit the stuff to come in. Mr. Kennedy. The quarrel I have with the present situation is this: That along the Pennsylvania Eailroad in my district there are a great number of factories that established themselves and went into business along that line of railroad because they thought they would BILLS AFFECTING INTEESTATE COMMERCE. 1287 have available that line of railroad, which would be their natural ally in distributing their wares in this country. Now, they get away from any sort of competition by the practice that they are engaged in. They contend that they are not compelled to be our ally in our competition with factories that have been built abroad for the manu- facture of pottery by American capital. They would have to be our ally if those factories were built in this country along some other line of railroad, but because, forsooth, they are not in this country, but are in France or Germany, they can make a lower rate for them, practically excluding us from the markets of the Middle West in order to get their trade. Now, it seems to me that the railroad ought not to make its rates so that it can disregard the great competitive fight that is going on all over. They ought to stand as the ally of the factories along the line that were built there only because they had a railroad there. Mr. Clements. Yes. Of course, in answer to that, they will admit it is a bad condition, but they will say, " If we do not carry the imported stuff to Chicago and to the Middle West, the Canadian railroads will, or the Illinois Central will, by means of boats to New Orleans and thence by rail to Chicago. It will get there anyhow, and we might as well participate in some of it and get a part of the business." Mr. Kexkedy. That theory of the railroads is in conflict with the idea that we ought to enjoy these public highways on an equality, each one with every other. Judge Knapp, as I understand, does not believe in the idea that competition is the ideal way of governing rates ? Mr. Clejeekts. No; I do not think he regards competition as of much importance as some of the balance of us do, perhaps. The Chairman. You may proceed with your questions, Mr. Ken- nedy ; but without objection, when you adjourn, it will be understood that the adjournment will be until the usual hour to-morrow morn- ing, at 10.16 o'clock. Mr. Kennedy. I myself think that the whole theory of railroads competing is wrong. Mr. Clements. I know a great many have that view. That is not the theory of the Government up to this time in those laws. Mr. Kennedy. You know that foreign railroads are managed so as to help their industries to get their products into the channels of international commerce successfully. Do you know of any foreign road that conspires with foreign manufacturers to help them dis- tribute their goods cheaper in the railroad's own country than they distribute the proglucts of their own domestic factories? Mr. Clements. I really do not know how that is. I do not know of any such case. There may be such, but I am not advised of it. Mr. Kennedy. The German roads carry the products of the Ger- man factories down to the seaboard cheaper than they carry regular domestic freight. They make domestic distribution in their own territory, I understand. Our roads will distribute for a foreign fac- tory under the present system cheaper than they do for our own pro- ducers here. Mr. Clements. You mean on imports ? Mr. Kennedy. Yes; on imports. Have you thought of any way that we could amend section 2? 1288 BILLS AFFECTING INTERSTATE COMMjattUJ!,. Mr. Clements. You could amend it by the provision in the Mann bill that they will not charge any less contemporaneously than they do on the domestic goods. Mr. Kennedy. I thought it might be possible to amend it by strik- ing out those words which take away from you control of the foreign trade and confer upon your commission the power to exercise a certain control that might seem to be in the line of public policy. Mr. Clements. Something you mean, I suppose, that would permit the commission to allow some difference, but not as great as they- make it now ? Mr. Kennedy. Yes. Mr. Clements. I suppose the statute could be framed that way, but of course it must be kept in mind that so long as you permit any difference, and limit that difference, it is not worth anything unless the difference be great enough to permit the outside traffic to come into this country, because that is the only reason they do it, to get a part of it. Mr. Kennedy. Farm produce has been carried to the seaboard over our railroads for export cheaper than it is distributed here in this country. Mr. Clements. Yes. Mr. Kennedy. That might be at times in line with public policy, and at other times it might be bad policy for us to encourage the carrying abroad of any surplus. Has your commission thought of any way that we could confer upon the Interstate Commerce Com- mission a discretion to control that matter? Mr. Clements. I suppose you could put into the law a provision to the effect that the difference should not be more than a certain per cent, or you could leave it to the discretion of the commission to be exercised in some way; to judge as to whether it was detri- mental to the public interests of this country or not, and to permit it to exercise its discretion. Of course that would be putting a very grave responsibility on the commission to determine such a question as that. Mr. Kennedy. Do you think it is in line with public policy now to have meats carried abroad so that they can be sold more cheaply in London, Paris, and Berlin than they can be sold in Washington, Philadelphia, and Baltimore at this time ? Mr. Clements. Well, I doubt if it is ; and still I suppose that so long as the freight rates that they charge for transportation within this country are not unreasonable, it ought not to be against the in- terests of this country to permit the surplus to go abroad as cheaply as it can, because our producers, wheuier on the farm or in the factory, are helped a good deal and the country as a whole is helped by the opening up of the markets of the whole world to take the surplus, rather than have the factories of this country shut down for one-third or one-half or one- fourth time, or because they have manu- factured more they can sell in this country. A few years ago it was ' stated that the cotton mills of this country had put into China all the cotton goods they would need there for a year, and they were hardly able to get any orders from China for quite a long period because of that condition, and it has always seemed to me that while it looks plausible on the face of it to oppose the policy of the railroads in this country hauling for foreigners cheaper than for home people, the BILLS AFFECTING INTERSTATE COMMERCE. 1289 least offensive part of it was the export business, by which the prod- ucts go out of this country and expand our foreign market. Mr. Kennedy. It seems to me we would be in line with the practice of foreign roads if we carried at times the surplus farm products, or even the surplus manufactured products, and we would be helping our production^ by affording to them the very cheapest possible freight rate in taking their goods abroad. Mr. CiiEMENTS. If the people of this country did not pay any more than is reasonable, and the railroads can join with the ship lines in transporting goods to other countries at a rate less than they charge for domestic service, they help this country in creating a bigger surplus and disposing of it. Mr. Kennedy. We have a condition to-day where American capi- tal is going abroad to build factories, partly because they can dis- tribute their goods to the American consumer more cheaply if they make them abroad than if they are made here. Mr. Clements. Yes; but all of that may argue that the rates in this country in respect to large volumes of the business may be too high. I do not know, but it may come from that. Mr. Kennedy. That is true; but is it right that pottery can be shipped from Trenton, N. J., to Rotterdam, Holl;md, and then reshipped and sent back across to this country to Denver, Colo., more cheaply than it can be shipped from New Jersey to Denver in the first instance? Mr. Clements. I should say that that would pretty nearly prove that the rate from New Jersey to Denver was an unreasonable rate, if they can afford to carry it to Rotterdam and back again and load and unload it as often as it is necessary to do it. That seems to me to be an unnatural condition. Mr. Kennedy. They do it. Now, if the Havilands, of New York— and, by the way, they are Americans— do build their factory in New Jersey or New York, it will cost them twice as much to ship their goods to Chicago as it does to ship them from Limoges, in France. What I want is your idea of how that abuse of the Ameri- can highways can be corrected without injuring any interest. Mr Clements. Well, in particular cases it could be done by a general law limiting the percentage of the difference that they might make on their import rate below the domestic rate; and it might be done by vesting the commission with power to deal with each par- ticular case on the facts, with a direction in ^^^ la\t? g-^^^^f . *^ commission in the exercise of its discretion I think it could be done either way. Of course there is this to be considered . i he &eme CouTin the import-rate case, spoke of the interests of the consumers in this country and of the fact that this competition from abroad tended to benefit the consumers and dealers m this country; and you run right into the protective-tariff policy of this Govern- ment of course You could write into this law, as the Mann bill now hS it a provision prohibiting a freight charge any less than ?he domestic rate. That will tend to exclude these importations to a lar^e extent and leave it in the power of the manufacturers of this country to demand higher prices than they now do, because you have to meet the competition of the foreign manufacturers' goods brought in Sithese rates^ It depends on whether you look at it from a high- 23738— PT 22—10- 1290 BILLS AFFECTING UsTTEBSTATE COMMEKCE. protective standpoint or from a free-trade standpoint whether you think it good public policy or not. Mr. Kennedy. I look at it from this standpoint : If we had equal facilities over the highways that belong to us, the duty on pottery would not need to be 60 per cent. It would not need to offend against and frighten the consumer by being so high. Our 60 per cent does not put us into the Middle West as against the discrimina- tion that the railroad makes to the American who makes his pottery in some other country. Mr. Clements. I know it developed in the investigation of the plate-glass cases over in Pittsburg that one of the men there, who was interested in the manufacture in Pittsburg of plate glass, had built a factory in Belgium, and was operating that as well as his American plants. I should think it would be quite possible to put into the law some reasonable restraint on the degree of difference in these matters. Mr. Kennedy. I think it would be in the line of public policy to permit goods that are noncompetitive to come in and be distributed in this country as cheaply as they can be ; but to permit the railroads to practically repeal the tariff laws when it is our public policy to en- courage American productions, to have the railroads refuse to enter into and be a party to the competition of the factory along its own line Mr. Clements. I think that is a matter that you could control in an act by fixing the percentage limit or by vesting the commission with the duty of ascertaining what would be a reasonable limit on it, and putting the authority in there to do it. As the Supreme Court said in the import rate case, that is a question that the commission, as a rate matter, has nothing to do with, and it is a thing that should be directed to the legislative department of the Government. You gen- tlemen determine what the tariff ought to be, and what its purposes are, and how far they are to be carried out, and you have this very question closely related to it as to how far you will permit that to be modified by the freight rates. Mr. Kennedy. Here is the way the problem presents itself to me: I have quite a number of factories along the Pennsylvania lines. They have no means of distribution except the Pennsylvania lines. Mr. Clements. Yes. Mr. Kennedy. They want to compete with Borgfeldt, who has built his factories in Germany. Borgfeldt can ship through New Orleans, he can ship through Charleston, or from Baltimore. He has available for his shipments many lines. My factories have but one, the lines of the Pennsylvania Company. Now, should the Pennsylvania Company be allowed to cut us off — eliminate us — from this great productive problem, and say " We will not help you. The thousand tons of pottery that you would like to ship to the Middle West we will get from Mr. Borgfeldt, in Germany, if we make a low enough rate? " Mr. Borgfejdt has 3 or 4 other lines to carry his pottery. Why should not the Pennsylvania Company be our ally for the purpose of entering into that competitive problem ? Mr. Clements. That goes to the whole question how far you will restrain them in their liberty under the present law. Mr. Kennedy. Are they harmed? They were chartered to take care of the traffic of that neighborhood. Why should they be ex- BILLS AFFECTING INTEKSTATE COMMERCE. 1291 cused from that duty as a public carrier, and go off into a fight for other traffic that does not need to come that way ? Mr. CIJ5MENTS. Well, what they would say to you would be this: " So long as we do not charge you any higher rate" than is reasonable for the service rendered, you are not hurt when we simply haul some of this foreign stuff to Chicago for a less amount than we haul yours; because if we do not do it they get it there anyhow at the same cost." Mr. Kennedy. But if they are not hauling the foreign stuff way below the cost of transportation itself they are charging us a robber's price. Mr. Clements. That may be. Mr. Kennedy. Should not thoroughgoing regulation and control of the railroads contemplate the power somewhere to put an inhibi- tion upon these public servants from carrying below cost? Mr. Clements. Well, the commission has decided now that any rate below cost, carried for one person, is a discrimination against other people, because that must necessarily add a burden on some- body else. The difficulty is in finding out what is cost. But you could put a rule into the law that where a carrier does participate in this import traffic it will be conclusively presumed -that that covers cost. That would fix a measure as to how high the domestic rate might be if the one yields cost and something more, because it is to be pre- sumed that they will not long carry unless they get not only cost, but something in addition; and if they do that on the import stuff it might prove their domestic rates to be unreasonably high. Mr. Stafford. On the question of express charges, I would like to ask your opinion. I would like to ask whether the attention of the commission has been called to the tendency of the express com- panies to merge into two or three companies that will cover the entire country? Mr. Clements. Well, I think there has been a tendency all the time toward the concentration of these different lines of business into the hands of fewer and fewer. It is so with the railroads as well as the express companies. Mr. Stafford. I understand that it is the policy of the commission at present to approve of competition among existing railroad carriers? Mr. Clements. We regard that as the policy of the law. Mr. Stafford. Is there any competition at the present time, or has there been in recent years, between the various express com- panies operating over the various railroad systems of the country? Mr. Clements. Well, speaking in a general way, I think there has been very little actual competition between them. There may Mr. Stafford. Has there been any general reduction of their Mr' Clements. You know we knew very little about the express rates until after the Hepburn Act was passed, and it was some time after that before we could get their rates filed. They were not re- quired to file them with us, and we had no law requiring them to be filed with us until after the passage of the Hepburn Act; and then it was a long time before we could get their rates m shape, as a prac- tical matter, and before they could get them in shape to file them 1292 BILLS AFFECTING INTEKSTATE COMMEECE. with US. So our knowledge of the charges of the express companies is limited to a comparatively short time. Mr. STAFroRD. In those cases of express company charges that have been brought before the commission for review, have they represented general commodities, or are they limited to single cases ? Mr. Clements. Most of the cases have been rather small cases— that is, single commodities between certain points; but we have had some rather large cases ; for instance, in the East to Arizona Territory. Mr. Stafford. But the general subject of whether the express com- pany charges as a whole are unreasonable has not been brought to the attention of the commission for adjudication? Mr. Clements. No, sir; you know the law which confines us to the investigation of these matters on complaint and hearing rather con- fines us to the four corners of the complaint. Mr. Stafford. But under the phraseology of the Ma.nn and Town- send bills the commission will be given authority to initiate an inquiry and pass upon those charges if they believe they are unreasonable. Mr. Clements. But you understand that would give us a much wider scope of investigation and determination in respect to the whole situation that would be involved. Mr. Stafford. Has the commission considered in any of its delib- erations whether it is possible to have competition among the rail- roads in handling express business? Mr. Clements. Well, I suppose there is just about as much compe- tition between the express lines over the different roads in trying to get business from one territory to another as there is between these systems of railroad in respect of that matter, because, as a practical matter, from one territory to another there have been for a long time these agreed arrangements between the respective lines that get together and confer. Mr. Stafford. I have understood that for many years — for twenty years, in fact — it has been characteristic of the whole development of the express-company business that there has been an understanding whereby they have parceled out the business over different railroad companies to individual express-company lines, and that there has not been any competition to speak of. Mr. Clements. I think the tendency is that way. You see it by the lines over which the respective express companies, the leading ones, conduct their business. Mr. Stafford. Do you know, as disclosed from the hearings or from investigations, the reason why the railroad companies are re- ceiving a higher percentage of the gross receipts to-day — it generally being 65 per cent — whereas back twenty years the return that the railroad received of the gross receipts of the express company's busi- ness" was 40 per cent? Mr. Clements. It seems to me that in several cases that have come to my own knowledge recently the arrangement between the railroad company and the express company was that the railroad should have 45 per cent. There may be, and doubtless are, other bases of dividing the charges. Mr. Stafford. It has been stated here in hearings, and I believe Commissioner Knapp approved it, that the usual percentage at pres- ent is 55 per cent of the gross receipts. Mr. Clements. To the railroad? BILLS AFFECTING INTERSTATE COMMERCE. 1293 Mr. Staitord. To be turned over to the railroad; whereas in the first express-company case that was passed upon by the commission in 1887 it was stated there by Commissioner Walker that the usual percentage that the railroads received was about 40 per cent. Mr. Clesients. Well, now, I would not want to make a positive statement of the averages or of the general proposition without look- ing a little further into that, because recently I have had a matter up where the Southern Express Company and the Adams Express Com- pany were involved in a matter on a shipment from Carolina points where, as I remember, the allowance to the railroad was 45 per cent. Mr. Stafford. Under the old agreements it was 45 per cent, but recently new agreements have been entered into. For instance, in the arrangement between the Chicago, Milwaukee, and St. Paul Kail- road and the Wells-Fargo Company, which has just recently taken over the business, I believe, of the American Express Company in that system, the railroad receives an aggregate amount of 55 per cent of the gross receipts; and from newspaper reports it is stated that the new express company immediately raised its rates so as to meet the higher percentage of charge paid to the railroad company. Mr. Clements. Well, you may be quite right about it in regard to those western express companies. Mr. Stafford. Of course the merchants of the country are gen- erally criticising the high charges paid to the express companies, and it is a matter of general knowledge that the express companies are earning very large dividends and are in some instances, to use a pop- ular phrase, " cutting melons " for distribution among their members. Mr. Clements. I have seen such statements as that in regard to the distributions they make. Of course the investment in the express company is very limited as compared to that in the railroad company. It may be that their profits are very high on the amount of money that they put into the investment. Mr. Stafford. Under the phraseology of these bills as you construe them, will the commission have the same authority to pass upon the reasonableness of the rates of the express companies as they now have with reference to the railroad carriers? Mr. Clements. I would understand it so. Mr. Stafford. From your experience on the commission and from your acquaintance with railroad traffic, do you believe it is possible to have competition in the carriage of express matter by the rail- roads? Mr. Clements. Do you mean between the express companies and the railroads, or by the railroads engaging in it? Mr. Stafford. No; for the railroads themselves to handle the express freight on their own individual lines just as they are han- dling the excess baggage of commercial travelers on their passenger and express trains! ., , j. Mr. Clements. I think it would be quite possible lor them to indulge in this just as far as they do in regard to carrying what is called freight. One protest that is made by some of the represent- atives whom I have heard on the outside— not in any formal case, perhaps, but the point is made from time to time— is that the lower you get the express rates the more of the small freight you will move by express, and between the large centers and territories in this country the express cars will multiply and will become an embarrass- 1294 BILLS AFFECTING INTERSTATE OOMMEECE. ment to the railroads in hauling them on their passenger trains, think they transport express cars from New York to Chicago in trains. Mr. Stafford. Either in trains consisting solidly of express cars or express and mail cars. Mr. Clements. Yes. Mr. Staffohd. The development of traffic must necessarily be, in the densely populated districts where there is great demand for free intercourse of business, to have more and more express trains. Mr. Clements. Yes; and it breaks up again for distribution close to a center like Chicago, and is carried largely on passenger trains — one or two cars. Their point is that the lower you get the freight rates the more of it there will be and the more it will embarrass their passenger business. But I do not, of course, regard any such reason as that as a good reason to uphold rates that are unreasonable; it does not matter what it takes in the way of facilities to do the business. Mr. Stafford. It is recognized, on grounds of public policy, that there is a certain character of small-package freight that it is necessary, for the best business interests, shall be dispatched as expe- ditiously as possible. Mr. Clements. Yes. Mr. Stafford. And that the railroad companies, as common car- riers, will provide means whereby that character of freight shall be transported as quickly as possible. Mr. Clements. I think it is the duty of the common carrier to do that. Many of the packages must be carried in that way because of the extra care that is necessary in order to keep from mislaying them or losing them because they are small. Mr. Stafford. My attention has been called recently to the prac- tice of some of the express companies and railroads requiring small packages to be bulked in large trunks, where they are for dispatch to. some certain place, thereby relieving the express companj' and the carrier of the annoyance of handling separately little packages by having them bulked in one large trunk for delivery at one certain place. Mr. Clements. When they are shipped by different people or to different people ? Mr. Stafford. When they are sending out packages by express companies. Mr. Clements. By numerous consignors to numerous consignees? Mr. Stafford. By numerous consignors to numerous consignees; yes. Mr. Clements. I am not familiar with that rule; but the rail- roads, you know, require that each shipment shall be separate. That is a matter that is in controversy between the commission and the railroads in court, as to whether they can require separate ship- ments or not. Mr. Stafford. I am very much obliged to you, Mr. Commissioner. Mr. Kennedy. I guess that will be all. Mr. Clements. Very well. I understand that I am excused from further attendance. BILLS AFFECTING INTEESTATE COMMEECE. 1295 Mr. Kennedy. I think that is the idea. We are very much obliged to you and to the other members of the commission. The Chairman. The following letters and suggestions mav be inserted in the record : Cedar Rapids, Iowa, February 18, 1910. Hon. Elbert H. Hubbard, Washington, D. C. Dear Sir : At a meeting of the board of directors of the Cedar Rapids Com- mercial Club, held Monday, February 14, the following resolution was unani- mously passed: "Resolved, That the Cedar Rapids Commercial Club heartily indorses the statement and argument of Mr. S. K. Cowan, attorney for the American Na- tional Live Stocis Association, made before the Committee on Interstate and Foreign Commerce, House of Representatives, on February 8, 1910. " We believe that the proposal to taJie from the commission all responsibility respecting the defense of its orders, leaving It only where attorneys appointed by the Department of Justice will appear in such cases in 'court, is a gross in- justice to the interest of all shippers and the people in depriving them of their rights to have the Interstate Commerce Commission, after mailing its orders, charged with the responsibility to put them in effect, from employing the means which it deems best; and, further, that the specific right of shippers to appear in any court involving the validity of the orders of the commission made in behalf of such shippers should be provided for in the law. " We heartily approve of Mr. Cowan's suggested amendment, on pages 14 and 15, as representing a fair and just provision to accomplish such purpose, feeling that such provisos will mean the equity which both the shippers and commission are entitled to ; and be it further " Resolved, That the Secretary is hereby Instructed to communicate the fore- going to all Representatives and Senators from Iowa, requesting their support." Will you kindly give this a favorable consideration at the proper time, and advise? Tours, very truly, John Wundeelich, Secretary. P. S. Copies of Mr. Cowan's arguments can be had on application to Hon. James R. Mann, chairman of the House Committee on Interstate and Foreign Commerce. Oklahoma City, Feliruary 18, 1910. Hon. Jas. R. Mann, M. C, Washington, D. C. Dear Sir; This will refer to my former letter of February 11 on the subject of the interstate commerce court. I have had a communication from Judge Cowan in which he points out the fact that the court proposed in the Townsend bill is difeerent from that which the shippers generally wish to have organized. I thinls that on the whole there is very little difference of opinion between Judge Cowan and myself on this matter. Unless the court is to be composed of men especially qualified to deal with subjects involving transportsition, at least a minority of them preferably selected from the present membership of the Interstate Commerce Commission, and unless they can either sit perma- nently at some central location, or, lilie the Interstate Commerce Commission Itself, have hearings at various points to suit the convenience of the great masses of people who have cases upon appeal, and unless the court would be ■given exclusive jurisdiction of injunction proceedings against state transporta- tion commissions and legislatures on transportation propositions, I do not see that it would be of much benefit to the shippers. On the contrary, I believe that it would be more of a menace than anything else. , ^^ . We are opposed to the centralization at Washington of any more of the in- strumentalities pertaining to regulation and control of interstate commerce, fullv believing that matters of this kind are somewhat different from legisla- tive affairs, and the shippers' means of redress should be brought as near to the center of population as possible. Either Chicago or St. Louis would be far preferable to Washington. ' ^. , If this court is not going to be of any benefit, we can see no particular reason why the additional expense of its creation should be incurred. Respectfully, yours, ^_ ^_ Johnston. 1296 BILLS AFFECTING INTERSTATE COMMEKCE. Short Line Railroad Association, New York, February 21, 1910. Hon. James R. Mann, Chairman Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. Dear Sir : Tlie short-line railroads, numbering more than 500 roads, with a mileage of less than 100 miles each, repi-esented by the Short Line Railroad Association, earnestly appeal to your committee to modify the exactions im- posed on the short-line roads under the interstate-commerce law as applied to printing the tarifCs of these roads. Under the act all railroads are required to file printed schedules. This imposes a heavy expense on the little roads, which they are illy able to bear and should not be forced to bear, particularly as a majority of them run wholly within one State. The principal cost in printing is composition and malie ready ; it is therefore plain that 10 or 20 cop- ies of the printed tariffs of the short-line roads cost them within a fraction as much as 500 or 1,000 copies cost the longer or through lines. The expense incurred by the short lines in this particular is out of all proportion to that which they are entitled to pay. It aggregates with them more than a million dollars a year. In view of this, as no public benefits arise from the particular form prescribed by the law in publishing the tariffs, as applied to short-route roads, we suggest that section 6 of the interstate-commerce law be amended so as to permit the commission, in their discretion, to allow typewritten, mimeograph, or hexograph schedules to be filed in lieu of those printed. Trusting you will fully consider this matter and bring it to the attention of your honorable committee, we remain. Yours, very truly, Short Line Railroad Association, By John A. Drake, Secretary and Treasurer. ^^'ashington, D. C, February 21, 1910. Hon. James R. Mann, Souse of Representatives, Washington, D. C. My Dear Sir: While n'bt connected at this time with the limited question before you relating to water lines, namely, bearing of section 9 of the proposed act linown as administration measure, there is a point that I would like to lay before you, as a representative of the peoiJle, which does have a very great bearing on the present question. There is, I believe, a simple and direct plan to enact a law which will settle this whole controversy in the interests of the people, will preserve their water lines from railroad domination, and will leave them free under the natural laws of trade to perform their great duties in rate regulation. The plan, I think, is worthy of consideration, at least as a suggestion, and I think some- thing of great importance may grow out of it in simplifying the question and in reaching what the people and their representatives demand. This, of course, is only limited to that portion of the commerce act which has any relation to water carriers. I know your time is limited and you are very much overworked, but before the matter of the proposed administration bill is settled I thought you might like to have this other matter before you, and you could determine whether it is wise at this time to inject it. My own view Is that at this session it is best to leave the water lines in statu quo by restoring the omitted clause and aim- ing to prevent possible repeal of the marine statutes, and adding definitive language in keeping the water hauls of the water lines at least temporarily free and Independent ; to give them, as it were, a breathing spell, in order that we may Intelligently, carefully, and effectively put on the statute books com- prehensive measures to preserve equilibrium between water and land carriers. I think the suggestion I would like to offer to you as a representative of the people would at least have the virtue of simplicity, and, after a full considera- tion of all the light that can be gotten on it, perhaps efiiciency in accomplishing the fullest purpose the peopl^ demand. I write this to you in your personal capacity as a representative of the people, and not as chairman of the Committee on Interstate and Foreign Commerce. If you think there is any virtue in the suggestion, you will know best whether BILLS AFFECTING INTERSTATE COMMEKOE. 1297 tL^S"* *° T""" '^®*°''*' ^^^ committee or not at this time What I fear Is hfwatexTme/cirbe?et"«!o".^'°rt^^^ ^^^''^^'^'^ rather Than ^ear it, 'and S propr^oSinTafiilte^^^^^^^ '' ^'-« ^ ripe opportunity to *^irell"nfeto'UX L'ar'si;™''^"^''^ '"^'^^^^^^ '"^ ^'^'^^ legislation.^'""^ Respectfully, yours, ' j^^^^^^ H^ jj^^^^_ Addenda. House bill 17536, has just been changed to House bill 21232. Please con- S L'Ua t^^lfrfef " ^"^^^'^ "-^ ^'^^^ "-^^ °^ ^^^^ '' °^ HO"-""^ SUPPLEMENT TO BBIEF PILED IN BEHALF OF WATEB CARBIERS, WHICH SEE FOE FTJLLEB EXPLANATION. i.-.fi"®'^'^"®'^* proposed: After the word "character," page 19, line 10 of S 5106 and page 18, line 23, of H. R. 17536, Insert : "And provided that this act shall only apply to a water carrier where no reasonable or satisfactory through route by rail and water exists, but this shall exclude the power to establish a through rail and water route where a reasonable or satisfactory through route by rail exists; and this act shall not be construed so as to in anywise affect such water carriers' water traffic; and any transportation by water affected by this act shall be subject to the laws and regulations applicable to transportation by water." The object of this amendment is : 1. That the water lines' local traffic may not be subjected to the risk of artificial regulation except where no reasonable or satisfactory through route exists. 2. That there be no doubt that the Revised Statutes of the United States, limiting risk at sea, are not repealed. 3. That the possibility of mistake in construction may be removed by defini- tive language protecting the local traffic of water carriers. It being admitted no change of status quo, with regard to water carriers, is intended, this amendment is suggested to remove all doubt which has been expressed on the effect of S. 5106 and H. R. 17536. The section of the present interstate-commerce act and the proposed amend- ments in Senate bill 5106 and House bill 17536 relating to water transportation. (The words in italics show the parts of the act to which reference is made.) Extract from section 15 of the present interstate-commerce law : " The commission may also, after hearing on a complaint, establish through routes and joint rates as the maximum to be charged and prescribe the division of such rates as hereinbefore provided, and the terms and conditions under which such through routes shall be operated, when that may be necessary to give eflfect to any provision of this act, and the carriers complained of have refused or neglected to voluntarily establish such through routes and joint rates, provided no reasonable or satisfactory through route exists, and this provision shall apply when one of the connecting carriers is a water line." Extract from section 9 of the proposed amendments to the interstate-com- merce law, knovm as Senate bill 5106 and House bill 17536 : " The commission may also, after hearing on a complaint, or upon its own initiative without complaint, establish through routes and joint classifications, and may establish joint rates as the majlffiiu;^ to be charged and may pre- scribe the division of such rates as herdRtefore provided, and the terms and conditions under which such through ^tote': - shall be operated, whenever the carriers themselves shall have refusewor neglected to establish volun- tarily such through routes or joint classifications or joint rates; and this provision shall apply when one of the connecting carriers is a water line. The commission shall not, however, establish any through route, classification, or rate between street, suburban, or interurban electric passenger railways and railroads of a different character." 1298 BILLS AFFECTING INTERSTATE COMMEECE. The following words are otnitted from above section 9 : " Provided no rea- sonable or satisfactory through route escists." The above extract from section 9 of Senate bill 5106 and House bill 17536, amended as proposed herein, would read as follows : " The commission may also, after hearing, on a complaint or upon its own initiative without complaint, establish through routes and joint classifications, and may establish joint rates as the maximum to be charged, and may pre- scribe the division of such rates as hereinbefore provided and the terms and conditions under which such through routes shall be operated, whenever the carriers themselves shall have refused or neglected to establish voluntarily such through routes or joint classification or joint rates; and this provision shall apply when one of the connecting carriers is a water line. The commis- sion shall not, however, establish any through route, classification, or rate be- tween street, suburban, or interurban electric passenger railways and railroads of a different character : And provided, That this act shall only apply to a water carrier where no reasonable or satisfactory through route by rail and toater exists; but this shall not exclude the power to establish a through rail and water route where a reasonable or satisfactory through route by rail ex- ists; and this act shall not be construed so as to in anywise affect such water carrier's water traffic; and any transportation by water affected by this act shall be subject to tlie laws and regulations applicable to transportation by water." (The proposed amendment is shown in italics.) (The committee thereupon adjourned.) HEARINaS BElfORB THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE OF THE HOUSE OF REPRESENTATIVES ON BILLS AFFECTING INTERSTATE COMMERCE Part XXIII WASHINGTON GOVERNMENT FEINTING OFFICE 1910 130MMITTEE ON INTERSTATE AND FOREIGN COMMERCE, HOUSE OF REPRESENTATIVES. JAMES K. MANN, IRVINO P. WANOER, Pennsylvania. FREDERICK C. STEVENS, MINNESOTA. JOHN J. ESCn, Wisconsin. CHARLES E. TOWNSEND.MlcmdAN. JAMES KENNEDY, Ohio. JOSEPH R. KNOWLAND, Califoknia. WILLIAM P. HUBBARD, WEST ymoiNlA. JAMES M. MILLER, KANSA.S. ' WILLIAM H. STAFFORD, WiacoNsra. n Illinois, Chairman. WILLIAM M. CALDER, NEW YOBK. , CHARLES O.WASHBURN, Massachusetts. WILLIAM C. ADAMSON, Geokoia. WILLIAM RICHARDSON, Alabama. CHARLES L. BARTLETT, GeobGIA. GORDON RUSSELL, Texas. THETUS W. SIMS, Tennessee. ANDREW J. PETERS, Massachusetts. BILLS AFFECTING INTERSTATE COMMERCE. The Chairman. The following letters and suggestions may be inserted in the record : Chicago, January 4, 1910. , Hon. James R. Mann, House of Representatives, Washington, D. C. Dear Sir: This CQmpany is one of a number of Chicago business concerns which met on the 29th of December and drew up a joint letter, which was sent to you, a copy of which is inclosed. We wish to make an individual appeal to you. Owning and operating a great many plants in this country, five of them in the Stalie of Illinois and two of them in your own congressional district, we feel that we have mutual personal interests in these two plants, and therefore we beg to advise you thdt since November 1, 1907, these two plants, employing 1,000 men, have been abso- lutely closed, and the men all idle; that recently we started up about 20 per cent of the capacity of these plants, hoping that by next year we would have them running full blast. We regret to say that at present we have no such hope. In fact, we doubt our ability to even keep them running at this limited capacity for more than two' or three months. We attribute the cause as entirely due to the alarm with which the financial public view the future earning capacities of the railroads. With ever-increas- ing demands of their employees, which if satisfied would reduce their earning capaci- .ties very materially, with all of the adverse railroad legislation now in vogue, and with threatenings of a vast amount more in sight in the coming Congress, it is not to .be wondered at that railroads should buy absolutely nothing but that which they are .compelled to, and here is where it affects us, and already we feel the conditions of -1907 repeating themselves. We believe that you can do the men whom you represent in general, and us in par- ticular, a great deal of good by opposing this ever-increasing and hasty congressional action concerning railroad operations. We do not ask you because of our love tor the railroads, but we are asking you for ourselves, because we are really the ones who are .suffering most from this excessive railroad legislation. The subject is too great to be confined in a short letter. We would gladly give you more definite reasons, but in the meantime we would ask you to please take our word for the situation, and use all the effort you can to hold back this senseless rush, at least until we have time to recover from the last assault. Believing and hoping that this will meet approval at your hands, I remain. Yours, very truly. Griffin Wheel Company, By T. A. Griffin, President. December 29, 1909i. Dear Sir: At a meeting held this day it was voted that we present for your con- sideration some facts, from our point of view, concerning newly proposed railroad legislation. We are all manufacturers, doing business in Chicago, many of our fa,e- tdries in your district, representing thousands of employees. In the outset we wish to disclaim any desire to ask favors for ourselves or for the railroads; all we want is justice. The Federal Government and the state govern- ments have passed many laws for the regulation of raihoads, and other laws will, be proposed, and some of them will be adopted. We admit the necessity of wise regula- tion of railroads by the nation and by the States, and if such wise regulation seems to injure us or our employees we will submit. _ _ . . c ^i, • » ' The particular subject to which we ask your attention is the revision ot the inter- state commerce law, which it is thought will, within a few days, be recommended. by the President. Should one of the President's recommendations be that the railroads 1299 1300 BILL^ APPECTING INTERSTATE COMMERCE. Bhall not make any changes in their tariff rates until the Interstate Commerce Com- mission shall have given its approval, we dread the effect which this might have on general business. We must do everything in our power to avoid a recurrence of the business stagnation which began in the fall of 1907 and continued for nearly two years. During that period many of our men were out of employment and the remainder worked only part time. Many manufacturing establishments in your district and elsewhere were idle. We believe that the business depression referred to was caused entirely, or almost entirely, by the feeling of antagonism which existed two years ago toward the railroads. We are not here to excuse the railroads for their faults, and we know they had many. We believe the railroads have made unusual efforts during the past two years to remove the causes of public dissatisfaction; they have accomplished much in that direction; they are still trying, and we believe will continue to do so. At the present moment there is a second decrease in railroad purchases; we feel it in our business, and some of us are again reducing our output and laying off men. We think this is the result of the present agitation of further railroad legislation, especially the fear that the rate-making power is to be taken from the roads. We ask that very careful consideration be given the subject before any additional regulatory laws are passed, to the end that nothing may be done to check the con- tinuation of the business prosperity which commenced a few months a^o. We have not undertaken in this communication to set forth in detail our reasons for objecting to taking the rate-making power from the roads, as that subject, and others, is treated in a letter dated October 27, 1909, addressed to the Attorney- General by the Railway Business Association, of which most of us are members, and of which letter a printed copy is attached hereto, and to which we ask your careful attention. We wish to impress upon you the seriousness of the situation to us as emplojrers of a large number of men, and request you as our Representative to do everything in your power to oppose the passage of any law that will take from the railroads the power to initiate or originate rates. Yours, respectfully, American Radiator Company, Adams & Westlake Company, Ajax Foi^e Company, American Steel Foundries, By-Products Coke Corporation, Block-Pollak Iron Company, Blue Island Car and Equipment Com- pany, Buda Foundry and Manufacturing Company, Camel Company, Chicago Bridge and Iron Works, Chicago Pneumatic Tool Company, Jas. B. Clow & Sons, Fairbanks, Morse & Co., Federal Furnace Com- pany, Featherstone Foundry and Machine Company, Griffin Wheel Company, Hewitt Manufacturing Company, Hickman, Williams & Co., Edward Hines Lumber Company, Robt. W. Hunt & Co., Joyce- Watkins Company, McCord & Co., Morden Frog and Crossing Works, Niles-Bement Pond Company, Pettibone, Mulliken & Co., Pickands, Brown & Co., Pneumatic Gate Company, .Rodger Ballast Car Com- pany, Sellers Manufacturing Company, Standard Forgings Company, united Supply and Manufacturing Company, Railway Steel Spring Company, Guilford S. Wood, Chicago Railway Equipment Company, W. H. Miner Company. Railway Business Association, New York, October 27, 1909. Hon. George W. Wickersham, Attorney-General United States, Chairman Committee Appointed by President to Recommend Changes in Laws Regulating Interstate Commerce. Dear Sir: At the request of the Railway Business Association for an opportunity to lay before your committee our views as to railroad legislation, you have mdicated a willingness to present for the consideration of the committee any written statement we might submit. We will confine our suggestions at this time to one subject, namely, the proposal suggested tentatively for discussion by the President of the United States in an address at Des Moines, Iowa, on September 20, to confer upon the Interstate Commerce Commission power to postpone freight-rate increases until final hearing and adjudication by the commission as to their reasonableness. To this legislation our association is opposed, not because of any lack of confidence in the personnel of the present Interstate Commerce Commission, for whose ability, experience, industry, and integrity we have the highest respect, but because we believe the proposal to be fimdamentally and economically mistaken and fraught with injury to the country. BtLLS AFFECTING INTEESTATE COMMEBCB. 1301 We be^ to remind you that our position is by no means only that of industries seek- ing to shield our customers, the railroads, from attack. We do not seek to represent the railroads, nor are we authorized to do so. We appear in our own interest. Industries dependent upon railroad purchases employ 1,500,000 men. The mem- bers of our association, though only a part of the whole, represent a capital invested exceeding 1500,000,000. Injury to our customers by unwise, unfair, or unnecessary legislation is damaging to our employees and to those whose investment of money has made the industries possible. With us wisdom in railroad regulation is a business necessity. Nor should it be forgotten that we pay freight bills aggregating millions annually and are as much interested as any other class of shippers m having rates reasonable and equitable. Our position is not one of general obstruction to all measures affecting railroads. We admit the necessity of and believe in the desirability of their regulation. Fur- thermore, our attitude being more friendly than critical toward the railroads, we hope our influence with them may help in their task of meeting the reasonable desires of their patrons. The problem, as we conceive it, is to establish such regulation as will make the railroads efficient and adequate agents of transportation and maintain equity between shippers and carriers. It is in this spirit that we now offer you our views. As reported in the press dispatches. President Taft's Des Moines speech contained the following: "Under the interstate-commerce law a new rate classification is to be filed with the commission. It is proposed now to authorize the commission to postpone the date that such new rate classification is to take effect. This introduces a new element into the act by placing the railroad company in the situation when it proposes to make a change in the rate that it should be prepared to show to the commission affirmatively that the change to the new rate is justified. "I am inclined to think that this is a fair change in the provision of the law. It gives to the public the same right to have changes which affect them injuriously inves- tigated before they go into effect as it does changes of rates by the railroads by appeal to the courts to have the order of the commission subjected to investigation and hear- ing. Railroads ought not to be permitted to change rates unless they can give a reason for it." It is our opinion that of all the proposals affecting railroads now seriously considered none is more dangerous than this. The proposed clause, if it accomplished the purpose defined in the above quotation, would absolutely deprive the railroads of the power to make rates. A careful study of the debates in both Houses of the Fifty -ninth Congress, preceding the enactment of the Hepburn bill, throws important light upon the subject. The proposal was to give the Interstate Commerce Commission power to investigate on com- plaint a scheduled freight rate and to declare it unreasonable if so found. Such a decree automatically mulcted the carrier to the amount unlawfully taken from the shipper, with interest. . It was contended by some opponents of the bill that in effect it would take away the right that should inhere in the carrier to initiate rates. In answer to this, and in defense of the bill, it was argued, and as events have shown, rightly, that the bill did not take from the carriers the power to initiate rates, because it explicitly author- ized the carrier to fix the rate, which went into effect and so remained until the commis- sion declared it unreasonable. . , -j President Roosevelt, in his message of the preceding December, had said: , "My proposal is not to give the commission power to initiate or originate rates gen- erally, but to regulate a rate already fixed or originated by the railroads, upon com- plaint and after investigation." . „,•„•,, J il, ;. T In debate many Senators and Representatives favoring the bill declared themfeelves opposed to any attempt to rob the carrier of his initiative as to rate making, and upon their assurance that it did not do that they asked support for the bill. The whole debate was replete with asseverations by those advocating the measure that the initiative as to rates properly belonged to the carrier Senator Lodge, of Massachu- setts, quoted from a circular sent out by Edward A. Moseley secretary of the Inter- state Commerce Commission, 1899, upon a,uthonty vested in him by resolution of the commission, in which occurred the following: ^ , ■^, i * „ i • „ "The commission neither asks nor desires to be invested with general rate-making Dower It simply asks for authority to correct rates which have been previously established by the carriers in the full exercise of their rate-making power when such rates are found by the commission, after due notice, investigation, and full hearing, to be in violation of the act." ... j j It would seem that the right of the carrier to initiate rates was preserved and spe- cifically sought to be preserved in the Hepburn bill by the pro-nsion that only after a rate had been initiated, filed, and effectuated by tolls collected could a compkint be entertained and a decree of unreasonableness issued. It is ]ust here that the Ii302. BILLP AB'FECTING INTEKSTATE COMMEBCE. proposition now advanced differs fundamentally from the Hepburn Act. How can the right of initiative be preserved if, as discussed in the President's Des Moines speech, no rate filed by the carrier can become effective until the commission has given its consent? If the commission, in its discretion, may postpone the effectua- tion of a rate, not by investigation of complaint and decree upon the merits, but merely treating the complaint as a prima facie cause for vetoing such initiative, pending the convenience of the commission in reaching a final conclusion, how can it be said that the carrier has power to make rates? Instead of sustaining the power of the carrier to initiate and establish rates, a law such as is proposed would merely grant to the carrier the prerogative of suggesting a rate for the consideration of the commission. How can anyone who in 1906 declared against depriving the railroads of their power to fix rates support now a bill to give the power of postponing rates to the commission? While the Hepburn bill was careful to give the shipper ample protection against any overcharge improperly collected, with interest, no protection is proposed or could be, proposed for the carrier aa a provision of the suggested change in the law. If the carrier can not collect the rate fixed by it until somebody has approved it, the carrier has certainly not initiated it. If, having fixed a new rate, the carrier must continue to collect tolls at the old rate until it is permitted by the commission to effectuate the new one, and such effectuation has been finally decreed by the commission, has not the carrier been mulcted out of the difference during the period of suspension? Has it not had earnings taken away to which it was entitled, as shown by the approval of the commission, without any possibility of their recovery? The carrier having, by intervention of uie commission, lost a sum of money which that body subsequently decided the carrier ought not to have lost, there is no power to secure this money from those who should have paid it. The chief ground on which it was urged in Congress that the railroads should retain their power of rate making was that such retention of power by them was in the public interest. Representative Mann, of Illinois, now chairman of the House Com- mittee on Interstate and Foreign Commerce, said in debate: "The power to fix generally absolute rates is the power to destroy competitive forces, to paralyze industries, to injure railroads, to interfere with all of the principles and methods of modern business life." What we have said relates to the general policy of permitting the carrier, as a matter of good business for all concerned, to initiate every rate. What has been contended above is that it would be a mistake to give the commission power to veto a new rate before it goes into effect, even if the decisions of the commission could be promptly rendered. We are convinced, however, that the practical evils following bestowal of this power would be vastly greater than the theoretical; for in the nature of things, the decisions would be delayed, in many cases indefinitely, owing to the inability of any commission to dispose promptly of so many protests as would certainly be filed. Is it not certain that when money could be saved so easily as by a mere protest, every advance would be protested by somebody? Not even so hard working and well organized a body as the present commission would be able to give more than cursory preliminary examination to each protested rate, and to avoid criticism would be obliged to treat all alike by postponing all. The railroad would thus find itself unable to raise any rate without having first presented its case at a hearing. Thus the rate-making power as affects increases would be taken from the hundreds of traffic officials all over the country whose specific business, each in his own juris- diction, is making rates, and given, under conditions that would make promptness and dispatch impossible, to the commission, who, even when possessed of as long experience as several of the present members, could only hope to give direct attention to a limited number of concrete industrial situations. . We do not believe it is desirable that such powers of obstruction should be vested in the shippers (of whom we are an important part) when the records for sixteen months after the passage of the Hepburn Act show that out of 5,952 complaints lodged with the commission, 2,105 were outside the jurisdiction of the commission, 3,374 were of such a nature as to require only correspondence or conference for their dis- posal (half of them being settled without hearing, the other half being dismissed), while the 473 complaints remaining were being decided at the rate of 155 in favor of the railroads to 86 in favor of the shipper, or a final resuh of less than 3 per cent of all in favor of the shipper. The chairman of the Interstate Commerce Commission itself, on behalf of that body, in a letter dated January 29, 1908, and addressed to the United States Senate Committee on Interstate Commerce, said: "If every proposed advance had to be investigated by the commission and officially sanctioned before it could take effect, the number of cases to be considered would psesipnably be so great as to render their prompt disposition almost impossible. BILLS AFFECTING INXBBSTAXB CQMMEBCE. 1303 "It is further to be observed that the passage of such a bill at this time would im- pose a burden upon the commiasiori which it should not be asked to undertake. "In instances of justifiable increase the necessary delay resulting from the probable volume of cases would work injustice to the carriers." It may be pointed out that there is a distinction between the bill to which Chair- man Knapp in this letter referred, providing for automatic postponement of every protested advance, and the present proposal to "authorize the commission to post- pone" advances (that is, in its discretion). We are forced, nevertheless, to conclude- that the commission, being unable to examine all protests, and thus obliged to post- pone all, would be burdened with congestion causing delays even greater than those- which would result from automatic postponement upon protest, since the discre- tionary power would iiivolve preliminary as well as final hearings and constitute so- much the greater embarrassment to the commission. From the vigorous opposition of the commission to any measure which would cause delays in the adjudication of protests, it seems fair to assume that that body will withhold its approval of any measure unless it contains effective provision for restricting protests to a number which could be passed upon promptly yet thoroughly. How could the right of protest be restricted? To what class of shippers will the right be denied? If it were denied to any the law could not stand and in point of fact is it probable that a measure can be so drawn as to restrict the number without doing a wrong to those excluded? It is our conviction that no such bill can be drawn. Certainly none of the bills now on the calendar and dealing with this subject attempt to restrict the number of protests to a working basis, nor do the published reports of the President's Des Moines address indicate that he had at that time under consideration such restrictions. Assuming that the proposal is to allow unrestricted protests of all advances, and that under such a system all advances would be protested and all postponed, with a continually increasing accumulation of arrearages amounting in most cases to holding- up of all advances indefinitely, we iirge upon your consideration what seem to us convincing reasons for not giving this measure the prestige of support by the federal administration. The proposal under discussion would impart to rates a general rigidity as a normal condition, which could only be changed item by item by special permission, obtained after legal process. It has been the elasticity of the rate structure that has built up the farms, mines, mills, and trade of the country, developing ne\v business while fostering old. In order to meet the requirements of industries and communities, the rate maKers must keep in daily touch with conditions and conform rates to the needs of their constituen- cies. The one thing indispensable to a railroad is that the industries whose product it carries shall be prosperous. What gives the far-sighted shipper greatest solicitude is that he should at all times have good ser-vice. The fraction of a cent involved in an increased freight rate can' perhaps be absorbed, while the selling price is maintained at a figure enabling him to hold his customers against competition in distant markets. Slow transit due to con- gestion or other inadequacies of freight service can not be "absorbed," and the cus- tomer may be lost altogether by failures in delivery. It is therefore quite possible that an increased freight rate, if it results in better facilities to the shipper, is not a burden upon him but his salvation. , _ These constant increases and decreases (and we believe in both m their proper places) must so balance that the raihoad shall meet its cost of operation and have an adequate surplus for making or financing improvements. It is one of the extraordinary facts of our national history that the average freight rate should have declined, as the statistics of the Interstate Commerce Commission show, rather than increased, when the steadily rising cost of many items entering into the service is taken into consid- If there have been increases either direct or through changes of classification, have- they been as great in proportion as the increase which the shipper has in the same period made in the price of his own goods? And in the meantime while the general tendency has been downward in rates, the raihoads like all other business enterprises have had to pay more for labor and materials. To cite a single example, the wages,, which are more than 40 per cent of the gross receipts of the railways of the United States, had so increased from 1897 to 1907, according to the reports of the Interstate Commerce Commission, that the number of days' labor which could be bought for a given number of dollars in 1907 was 16.27 per cent less than m 1897 If rates can not be increased without legal process the raihoads will make reductiona only with the greatest caution . To hold up all proposed mcreases as suggested would of course, automatically hold up all reductions. Shippers or boards of trade often ask railroads to make, temporarily, an especially low rate in order to give relief from dis- 1304 BILLS AFFECTING INTEESTATE COMMBBCE. tress caused by some emergency. As a temporary measure the railroad can and does afford this relief. As a permanent rate the reducfion would usually be impossible to maintain. No railroad would voluntarily reduce a rate under such conditions if it knew that it might not be able, when the temporary exigency should have passed, to irestore it without a long-drawn-out controversy. Chairman Knapp, in the letter from which we have already quoted, said: "If no rates could be increased without the approval of the commission after affirmative showing by the carrier, it might happen that many reductions now volun- tarily accorded would not be made." Thus we should have a situation in which the railroads could not change their rates •because of the law, and the commission could not change rates because unable to clean ■up its docket. Practically, therefore, the proposal would mean only a petrification •of rates. What public dissatisfaction with the existing system has been shown to justify any ■such revolution as would be involved in such legislation as is suggested? Do the 5,952 complaints already referred to as lodged with the commission, with the result that about 3 per cent were ultimately decided in favor of shippers, justify such action? When the commission states that it would have to examine 150,000,000 rates to determine the increases made in the last two years, do not the 5,952 complaints made appear small and the cases finally decided in favor of the shipper become infinitesimal? Do not these figures set up a strong presumption that rate making by the traffic officials of the carrying lines has on the whole been fair to the shipper? We have in- vestigated and found that on most lines less than 10 per cent of all the rates filed since July 1, 1906, involved any change whatever, either up or down. Where there were changes a great many were reductions. The argument has been advanced that ' ' established industries " are now at the mercy "of the carrier so long as it retains the power to increase rates. But is it not the fact that under the law as it stands such an industry has its complete remedy in restoration of ' the excess with interest when a rate is declared unreasonable, while under the law as proposed the carrier would be deprived of its rightful revenue without remedy if its rate as filed were sustained? The Interstate Commerce Cominission in its reports for 1907 and 1908 indicates •certain types of enterprises which it regards as being in a position to be injured if the railroads continue to possess the power to advance their rates without hearings before the commission. An instance cited is that of the coal operator doing business under contracts' with customers. The commission remarks: "The margin of profit is such that an advance in the transportation charge of no more than 5 or 10 cents per ton may convert a profitable contract into a losing one." The operator, however, can and if prudent always does establish complete protection for himself and his custo- mers by inserting in the contract a clause providing that if the freight rate shall increase the price shall increase correspondingly and that if the freight rate shall be reduced the customer shall have the full benefit. The same expedient would, of course, be applicable to any commodity. Suppose, moreover, there were no such method of protecting contractors, and that the commission were to be authorized to postpone in its discretion for their benefit the going into effect of rate advances, how would the commission reconcile the conflicting demands of various dealers whose contracts were not made and could not be made tor identical periods? It seems to us that the task would be one of hopeless confusion. We have been unable to imagine a legislative device by which shippers can be insured against changes in the price of transportation any more than they can be insured against changes in the^jrice of labor, materials, or the sudden and unexpected imposition of new taxes. We are unable to see upon what real grievance the request for this power is based or what benefit would result from conferring it. On the contrary such a departure would involve the serious dangers which are enumerated above, and we respectfully urge you that unless a way can be found to provide effectually against the evils which we have mentioned, you will not recommend that the President give this proposal the influence of his potent official sanction. George A. Post. W. G. Pearce. H. H. Wbstinghouse. H. G. Proitt. 0. H. Cutler. J. S. Coffin. W. H. Marshall. W. V. Kelley. E. S. S. Keith. E. L. Adreon. A. H. Mulliken. J. H. Schwacke. O. P. Letchworth. a. M. Kittredge. Charles A. Moore. John F. Dickson. Frank W. Noxon, Secretary. BILiS AFl-BCTtNG INTEESTATS: COMMEKCE. 1305 „ " Pasadena, Cal., January 5, 1910. Hon. James R. Mann, House of Represeniatimes, Washington, D. C. _ Dear Sir: I noticed by the papers a day or two ago that you haye introduced a bill m_ the House providing for an amendment of the interstate-commerce laws, which I think is a very wise move, as the present law is very defective, giving the railroads a chance to rob the people, using this as a shield. I wish to call your attention to a case of my own. As you probably know; my health has not been very good tor the last few years, and I have been spending my winters in Pasadena, having a house here, and living in Chicago in the summer. I am in the habit of sending an automobile out each year; this year I shipped two. Before shipping I was very particular to have them billed properly to avoid an over- charge at this end. I got a rate from the contracting freight agent of the Santa Fe from the geileral freight agent of the Chicago, Burlington and Quincy, and from the local agent of the Chicago, Burlington and Quincy at Naperville, 111., from which point they were shipped. These rates all harmonized. The cars wereproperly weighed. 1 received a bill of lading and prepaid the freight, which amounted to $120 on each car. On arriving here the, agent of the Santa Fe advised me that there would be $126 additional charges on the machines, that the agent at Naperville had made a mistake in billing the cars, and had not charged the proper rate. You can imagine how I felt after being as careful as I was to avoid trouble. The agent here informed me that under the provisions of the interstate-commerce law they -were forced to adhere to uniform tariff rates, and while he realized the injustice of it I would have to take my medicine. Otherwise he could not turn the cars over to me. I took the matter up with their general freight agent in Los Angeles and also the traffic manager of the Santa Fe Railroad, and they could give me no relief. In fact the Santa Fe people here and in Los Angeles informed me that they were having trouble of this kind every week and had some that were more aggravating than mine. Now, you can appreciate the injustice of this sort of treatment, making the shipper responsible for the acts of their own agents. I shipped these cars in good faith and pre- paid the freight, and they agreed to deliver them to me in Pasadena at that price. Of course the only thing I could do was to pay the overcharge or replevy the cars, and lose the use of them and incur a lot of expense. As I mentioned before, this thing is occurring every day with shippers and it is simply a confiscating of their property. There should be a penalty where railroads give one rate and collect another. They should be held responsible tor the acts of their agents, and I hope in any amendments offered to the interstate commerce law you will incorporate this, as I can furnish plenty of people who have been treated just as I have. It looks to me, after reading the interstate commerce laws, that the attorneys for the railroads had much to do with drawing this bill. Yours, truly, T. P. Phillips. Chicago, January fl, 1910. Hon. James R. Man.n, House of Representatives,- Washington, D. C. Dear Sir: Kindly note attached copy of our market letter of January 20, in which we refer to the unsatisfactory transportation service throughout the country. A copy of this has also been sent to Representative J. G. Cannon, the Speaker of the House. It is quite possible that you will find this a subject worthy of inquiry by the Govern- ment with a view of bettering the service furnished the people. In it, it strikes us, you will find one of the chief reasons for existing high prices and dangerous inflation of values Our company is in the business chiefly of buying and selling the actual cash grain and seeds, and, handling as we do approximately 5,000 cars per annum, we are in a position to know directly how severe are the hardships imposed on the grain trade of the country by the poor service on the part of the railroad companies. Gram is in transit from four to eight weeks, and in some cases even longer, that should run in to market in from three to ten days. ... . ,, . i, i. j j Every concern of any importance in the gram business m the centers has hundreds of thousands of dollars tied up, and the aggregate runs away into the millions. It is a well-understood fact that the creplit of a large part at least of the gram trade is stramed to the utmost. Banks are compelled, for self -protection, in manv instances to refuse further advances, even against bills of lading, and the farmers and shippers of grain m the West while willing and anxious to sell and to move their grain, are utterly unable to do it ' Country elevators almost everywhere are full to overflowing and our shippers in the West, comprising between 500 and 1,000 of the smaller grain shippers throughout 1306 BIL1,S AFFECT^INq IN|3?:^1BST,4P5:]5.^MMEEPE. the Mississippi Valley territory, coniplain bitterly of -the lack of facilities, and of the Eossibility of loss in their business owing to the fact that they can not dispose of their oldings. We realize fully the fact that severe weather, such as we have had this year, will necessarily hamper the transportation companies, but, with good management, it would hardly be possible to cripple them more than temporarily, and business would not be so materially delayed. If the management of the railroad companies made proper provisions for severe weather, such as can be expected every season — if their engines and rolling stock were put in good shape, sufficient snowplows, men, machin- ery, etc., provided to kegp the tracks clear — ^there is little question that the actual delays would be mush less, and perhaps not enough to seriously injure the business and trade of the country. As it is, the western roads between Chicago and points of shipment are in the worst possible shape, loaded cars are strung along all switch and side tracks throughout the country, and conditions seem to be getting worse rather than better. It may be impossible to do much to help this state of affairs for this season's business, but immediate inquiry and pressure brought to bear would undoubtedly help some and might prevent a recurrence of this sort of thing for the future. Tight money and inflated values resulting from a tie up such as described above could easily result in semipanicky conditions, especially if coupled with equal inflation in the stock markets of the East, and the usual disastrous consequences, as evidenced by the severe failures of the past few days. We would not like to see the panicky condi- tions of two years ago repeated, but we fear that unless relief in the shape of a release of the large amounts of money tied up comes soon there is great danger of a repetition of the bad state of affairs of that time. In any event, governmental inquiry should be instituted, with a view of regulating the railroad service throughout the West. Our information goes to show that the eastern roads have not been so badly troubled from a tie up as the western. Whether this is owing to better management or to less severe weather, we do not know. We are inclined to think that more pains were taken by the trunk lines running fromi Chicago to the seaboard to keep their tracks clear than by those in the West. Their motive power and rolling stock is in much better shape and shippers from Chicago to the East are making fewer complaints. We will be glad to furnish any further information along this line, such as is within our power, if required. Yours truly, Somers, Jones & Co. A, L. Somers, Preddent. Chicago, January 20, 1910. Dear Sirs: The markets are higher to-day. Shorts covered freely, and there appeared to be renewed investment buying. The supply of cash grain is light. The railroad companies are not bringing it in promptly. It is hard to understand the atti- tude of the railroads. It would seem from the manner of handling their business that they have had a stroke of paralysis, and that it should be made the subject of inquiry by the Government to effect a cure. On the face of it, it seems inconceivable that a raihoad conducted for the real interests of its stockholders and the public should go all to pieces with a few weeks of zero weather. The old story of defective motive power and rolling stock, so evidently the result of false economy and bad management, is becoming tiresome, and it is high time that something was done by the Government to conserve the interests of the people and to give the country the transportation service to which it is entitled. Millions of dollars' worth of grain and other property is tied up," money is getting; tight, interest charges are piling up, and the consumer pays. We advise strongly to hedge holdings of cash grain of all kinds in futures in the pits here. This is especially true of the wheat, oats, and barley, competition for all of which from other exporting countries is extremely great. Barley prices will probably depend largely on oats values, and should also be hedged in the May oats. Wheat prices look high in view of the fact that other exporting countries are supplying European needs. This country is likely to have a large surplus left over unsold unless prices get down considerably lower before the opportunity to sell abroad is lost. Russia's enormous crop of wheat, 783,000,000, is its money crop and will, no doubt, be marketed freely during the winter. The possibilities for shipments from Russia are best shown by the following table of crops, as it is not generally known how large Russian crops are: BJjLLS AFFECTING INTERSTATE COMMBKCE. Crops of Russia. Rye. Wheat. Oats. Barley. " 1909 Bushels. 806,835,000 782,790,000 808,126,000 666,846,000 Bushels. 783,000,000 569.486,000 510,692,000 508,392,000 Bushels. 1,145,373,000 942,571.000 907,261,000 713,005,000 Bushels: lig?::::::::::;: :::::::::;:::::: 377,926,000 1S06 Wheat—The May closes i, the July g- higher, samples following. Durum is 95 to 1.02. All sample wheat without dockage for dirt. ^o^°J.""~"''^^y ^^^ ^^^y ^^°^^ i higher, samples J to 1 cent higher. Sample grade- 58-60i; 4 mixed, 631-64; 4 Y, 64-64i; 3 mixed, 65; 3 Y, 65-65i; 8 whiteT 65l-66i;, 2 Y, 68 cents. - Oats.— May and July close i higher; samples J to 1 cent higher. 4 whites, 47i-48i, mainly 48; 3 whites, 484-491, mainly 48i to 49; standards, 48|-50 cents. Rye.— Film. No. 2, 80-81. _, Timo^.— Strong. Spot seed quotably 3-3.80, mainly 3.25 to 3.50. Spring trade 18 setting in and, with probable delay in arrival, immediate shipments for best results are in order. Bar%.— Steady to 1 cent higher. Malting, 67-73, mainly 69-71; mixing, 63-65, and screenings, 50-65. Supply too light. Large quantities of barley in transit, but not available, and maltsters compelled to buy locally to replenish their stocks. High prices for cash grain of all kinds likely, as not much show to get the railroads cleaned up for another month. Glosiiig prices are: Wheat. Corn. Oats . my. July. ^fptember SI. 091-1 1.008 " SO. 68i A .67W .67fB i0.47|-i ,41|' Yours, truly, SoMBRs, Jones & Co. Bureau of Railway News and Statistics, Chicago, January %8, 1910. Hon. Jas. R. Mann, House of Representatives, Washington, D. C. Mv Dear Mr. Mann: I wish to thank you for your kindness in sending me your own bill and the Townsend bill containing the proposed amendment of the act to regulate commerce. While, as you are aware, I am one of the students of railway problems who does not believe that any crying necessity exists for further legislation on this subject, especially at the present time, and without giving the Hepburn Act time to prove its value or its weabiess, I am inclined to think that your bill contains lespiobjectionable matter than Mr. Townsend's, which is largely a formulation of the pleas of the Interstate Commerce Commission for more power, where they should ask for a limitation of their opportunities to cripple the railways, It seems to me that Congress has missed absolutely the one feature of all attempts to regulate the railways where there is need of a change, and this is in the selection of the body intrusted with the power to regulate. There should be a brief act declar- ing that the commission should be composed of three lawyers chosen from the circuit bench, and four men of practical experience connected with railways — one from the traflSc department, one from the financial department, one from the operating depart- ment, and one, like Mr. Clark, to represent the railway employees' view of the situation. Then we should have a commission fairly well balanced and equipped to sit in judg- ment over the problems submitted to it. The control of railway statistics should be taken absolutely out of the hands of the commission and placed under the control of the Department of Commerce and Labor. For over twenty years these statistics have been the shuttlecock of an educational theorist who could no more manage- 10 miles of railway than I could. 1308 BILLS AFFECTING INTEESTATB COMMEEOE. The commiasion and its secretary should be absolutely prohibited from agitating for or against legislation relating to its duties. It is nothing short of a scandal — the use made by the commission of its position to antagonize the great industry which it is ai)pointed to protect as well as to regulate. The trouble with the whole situation is that the railroads are' afraid to say their Bouls are their own. As to your bill, it seems to me that you do not define sufficiently the class of men torn whom yom- commissioner of transportation should be chosen ; and in these days of high cost of living I do not believe you can get a man fitted for the position for $6,000 per annum, nor a man fitted to be his deputy for $4,500. I was interested to see that you have made provision for the issue of tickets or passes for transportation in payment for publication in newspapers of brief time-tables, showing the arrival and departure of passenger trains at the i)lace where such newspaper is published. I think that this provision is all right, but it should be made clear that this exchange of transportation for advertising should be confined to time-tables and not permitted to run for general advertising. Both as an ex-newspaper editor and as a railway statistician it seems to me that the time-tables of railways should be published for the convenience of the public, takmg the place of its being posted at railway stations or in railway offices. Asking your pardon for imposing these rambling thoughts upon you, I am, with personal regards. Yours, very truly, Slason Thompson. COPT OP LETTER AND PETITION OP GRIFFIN WHEEL COMPANY. Chicago, III., Jammrg 29, 1910. Dear Sir: We, the undersigned, a self-appointed committee of Chicago business men, appeal to you, as one of Mr. Mann's business constituents, to sign the inclosed. As Mr. Mann is quite prominent in railroad legislation, the fact of a large number of business firms who furnish employment to a great number of his constituents appeal- ing to him individually (as this is intended) will undoubtedly have great weight with bim, and quite possibly with other Congressmen who will become aware of it. The appeal represents nothing but your individual interests. A prompt return with your signature will greatly oblige the committee. Yours, truly, American Steel Foundries, By Wm. V. Kelley, President. American Brake Shoe and Foundry Company, By J. B. Teebbll, Vice-President. Blue Island Rolling Mill and Car Company, By F. H. Niles, President and General Manager. Geo. Carr, Vice-President. By-Products Coke Corporation, By Mason H. Sherman, General Manager. Dearborn Drug and Chemical Works, By RoBT. F. Carr, President. Federal Furnace Company, By W. L. Brown, President. Featherstone Foundry and Machine Company, By C. D. Pettis, Vice-President. Griffin Wheel Company, By T. A. Griffin, President. Iroquois Iron Company, M. Cochrane Armour, President. Pickards Brown & Co., By C. N. Boynton, Vice-President. Rogers, Brown & Co. Railway Steel Spring Company, By W. H. Silverthorn, President. Shbrwin Williams & Co., By R. W. Sample, District Manager. Willard Sons & Bell Company, By L. C. Willard, Secretary. BILLS AFFECTING INTEESTATB COMMEBCB. 1309 Chicago, January g9, 1910. Hon. James R. Mann, Washington, D. C. Dear Sir: The undersigned,, doing business in your district, believing that you desire to protect and advance the interests of your constituents in every prober Vay, submit the following request: We would have you do all that you can to call a halt on all radical railroad regular tion in this Congress. Without questioning the merits or demerits of the railroad legislation proposed by you, or others, we believe that no harm can be done by limiting much of the proposed railroad legislation, and giving railroads opportunity to work out or demonstrate their intention of carrying out railroad legislation already in effect. We know that we have suffered greatly in our business during the past two years, largely on account of the poor financial condition of railroads. Six months ago thai condition improved; we all have noted how promptly business picked up. During the past three months it has gradually dropped off, with relatively decreasing new business in sight, and again some of us are laying off our men, and some of us have stopped putting our idle plants in order for resumption, and all because of the volume of threatened disturbing congressional legislation. Do not think that we are doing this for the sake of the railroads, or that they are urging our actions. We need no spur to wake us up to our condition. .'We want our Congressmen to help us, and under the circumstances think it is their duty to do it. We know raihoad legislation has been necessary, but it has reached a point where it is excessive and is crippling us and the whole business community. Yours, truly, . Fort Wayne, Ind., January 10, 1910. James R. Mann, Chairman Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. Dear Sir: We note with much interest that you have introduced a railroad-rate bill in which we are very much interested . We do not note that you have gone into it as far as our President has in the way of recommending a commission facilitating the handling of matters of this kind or whether you have inserted in your bill a clause compelline railroads to transport commodities according to the rates named in the bills of lading fssued against such shipments. We have recently been obliged to present bills for overcharges resulting from overcharge on shipments of May, 1909, and under the rules of the Interstate Commerce Commission and of the railroad companies covering .refunds we have been compelled to secure the original bills of lading. By ail the modem means of evasion: and, ins^ttention the railroad companies have succeeded in keeping us out of the possession of these bills of lading, which were in their files and where their agent in New Orleans could have put his finger on them without five minutes' notice. In this way we have been unable to get all these bills of lading returned until a few days ago or at the close of the year 1909. We have now started the claim on its way to get the proper signatures for refund, and this wiU also require quite a number of days or weeks to secure the same. It would seem therefore that in all probability it will require one year's time or more to secure a refund of about $200 on 9 cars of hay, which were overcharged. We are crting this instance particularly for your attention in order to give you somewhat of an idea of the feeling in the country among shippers generally in regard to this matter and in order that you may be thoroughly awake to the importance of haying some proviso in vour bill which will absolutely compel the railroad companies to collect and demand only the amount of freight as stipulated in the bill of lading, which constitutes and is the contract between the shipper and the transportation C9mpany. We shall be elad to have a full copy of your bill as soon as the same is printed and ready for disftbution, and wish to thank you in advance for any courtesies you may show ub in this direction. „ b . ott a^ Pn Very respectfully, S. Bash & Co. P S —You possibly are aware of the fact that the railroad companies have done evervthine they could through their agents and general managera to make the present fnSate commission law and the rulings in reference to refunds on overcharges i"ti odious tX shipper as they could make it, They have done this or the pur- pose^f trying to secure public sympathy and sentiment against the present Interetete Commerce Commission. It is needless to say they have only aggravated matters and n^de the feelings on the part of the public more intense than it ever was before. 'Wlb BILLS APFECTING INTEESTATEl COMMEKdE. ■ ' '" > New Yohk City, February 9, 1910,.'^ To the Ponvmittee on Interstate Commerce, Washington, D. C. Gentlemen: I am a stockholder in a number of railways and wish to lay before you in my humble capacity as a citizen of the United States a few suggestions bearing lij^ii ^he issues mentioned in proposed railway legislatipn now before your committee, as t understand it. I spent some fifteen years in the railway and steamship work and gqt .some bitter experience therein. I believe in government regulation along worlsable jlines, but so much legislation is being proposed which substitutes the official^ of the government for th« officers and directors of the companies, and in some cases ttfe stockholders even, without due process of law or the Government acquiring any legal rights of ownership, as provided in the Constitution, whereby the Government must 'pay for property in advance before it attempts to run it, so to speak. , I wish to suggest a number of recent court decisions in the last year or two which V.ery clearly outline the fact that some laws now being cited and proposed are hardly ^constitutional. First, most railways exist by charters, which were legally granted by States. They jnentioned certain rights all around, and in most cases limit the charges to the public. ,yhe Supreme Court in the recent case of the Twin City Railways, very clearly stated that a charter is a binding contract all around, and that the city councils could np^ pass laws compelling changes in fares, issuance of transfers, etc., without the agreq- jncint of the company, where the charter stated the limits, etc. Some day some stock- hoider, tired of holding stock for long years without dividends, will get up a case along these lines on some steam railway. Some of the state railway commissions are authorized to pass on issues of slock, etc., as proposed in the national bill. If you will look at the decision of the New York court of appeals in the Delaware and Hudson bond-issue case, the court very cles^rly said that if the issues were within the charters, etc., the commission could not prevent, and above all could not assume the rights of the boards of directors of the companies, etc. A similar case applying in the national courts might meet wilih similar decision, if the Interstate Commerce Commission were empowered to try it on. There could be no objection to a law that gave the commission the right to see that the ■railways do spend the money for the things their reports say they intend to use it for. etc. Since the Sherman antitrust law was passed your Congress has passed the Hepburh ■|?ill, etc. In. Arkansas recently they put in a railway commission which passed ok ■certain things, and then some one untertook to punish the railways under the antitrust bill in that State. The state supreme court decided that when the railway commissioli ^vas put into existence the terms of the antitrust bill were canceled so far as it relates to railways. Possibly the same thing could be said now if ever some stockholder brings that point to the United States Supreme Court, claiming that the latest rail- way bills supersede the antitrust laws as relating to railways. ■' The city of New York is building some subways here. The city undertook to tilize and damage certain property without the usual due process of law, etc., com- pensation in advance, on the grounds that it owned the streets, etc. But the court of appeals decided that building a railway, etc., underground was not using the streets for the purposes they were originally dedicated to, and fiu-ther that the city had only the rights of a railway corporation when it went into that business. Possibly the Government of the United States is in the same, position when it undertakes to con- iBscate the rights of stockholders, etc., either by control without purchase or operation after purchase, if any stockholder ever gets his hearing in the United States courts oh this point. The Kentucky railway commission undertook to reduce all rates in Kentucky on, a percentage basis some time ago, but the Supreme Court of the United States decided lit could not arbitrarily do that sort of business even on purely intrastate rates. The whole trouble has been, in my opinion, that Congress has undertaken to cui;e all the railway evils in one big bite out of the evolution of the past; has tried to have a handful of men be judge, jury, and prosecutor oh all railway questions for a terri- tory comprising some forty-six nations, more active than the whole of Europe in many ways. I can imagine the troubles of an interstate commerce commission appointed ,,to regulate all of the railways of Europe, as we are trying to do in this country. . The Government should try to make railways live up to published tarifis, where "complaints come to them; see that the railways keep honest records, and spend mon^ _pxactly as their published reports say they do; try to settle the disputes between rival .roads, sets of shippers, markets, and sections of the country, according to the con- ditions presented in each case, since no two are alike, through a commission, the same as the Government keeps supervision over other industries. Where anyone refuses, prosecute men in the courts in the good old way our fathers provided, instead of com- BlttS AFPBfe'SiN'G iiSltliaSTATE COMMfiKCE. 1311 panies, thereby punishmg the guilty menand not the innocent and helpless stock- holder. Think of how funny it Would soiind if the Government undertook to fine a bank out of its capital and surplus every time a dishonest cashier or other officer does something contrary to the law or good morals in business, and let the guilty cashier get away with his ill-gotten gains. It takes time to build a road, to develop its territory, to induce settlers and indus- tries to move in, etc., and I fail to see how you can cure all the ills incident thereto in a year or two, as seems to be the effort of Congress with frequent changes of laws touch- ing fundamental things, instead of simply amending existing laws, as practice shows desirable, or as the courts outline. The whole scheme of the new laws appear to me to be playing into the hands of strong companies and weakening the weaker ones, preventing competition by the building of new lines, etc., where existing lines hold rates too high after the territory builds up. I have a fear that the drastic schemes proposed lately are so far toward the Govern- ment overreaching its powers, under our Constitution, that some day we will get a court decision knocking out the whole railway regulations as they now exist, since most of them are contrary to many decisions now given, as you will see by reading some of the decisions I have mentioned. I would rather see the regulation strength- ened along sane and workable lines. When I come back from Europe I always wonder why we pound our railways, when one considers the rates, service, intense rivalry between States, markets, etc., when the railw-ays pay in taxes an amount equivalent to about 3 per cent on their gross outstanding capital, some 6 per cent of their gross earnings, pay the highest wages, have the lowest rates by any methods you can figure, harassed by employees, shippers. States, and nation, and yet go on year by year increasing plants, etc. There are many dishonest and scheming men in the railway business, but possibly no more on a percentage basis than in other lirieSj a,nd taking it all in all, I suppose the only way the poor share owners will ever get a fair show in this country is to form a union and do what all the other unions do — fi^ht for their rights guaranteed to air by the Constitution. I fail to see why a millionaire railway stockholder who bought stocks dirt cheap, or his ancestors did, which enhanced in value with the growth of the country, is a criminal and constantly punished by fines, etc. Only about 5 per cent of our national wealth is in railway securities: and while the railway stockholders are getting rich on their 5 per cent of the total wealth, by growth of country and business, certainly the other 95 per cent of the total wealth is increasing just as fast or even faster, because no one tries to take 6 per cent per annum of the gross earnings of that 95 per cent from it each year in taxes, or allows nine men to say how fast it shall grow, or what it is worth, what it shallspend for improvements, etc . I wish that some far-seeing Congressmen would have the stamina to come out just once and say that they would like to see things let alone for a year or two, until after some of the unsettled cases now in the United States courts are decided by the Supreme Court, so intelligent action can be taken thereafter, instead of ill-considered, unin- telligent laws placed on the books in the meantime. Yours, very humbly, H. P. Dippe. Chicago, February IS, 191Q. Hon. James R. Mann, Washington, B.C. . . ■ Deah Sir: I have no especial grievance against your bill, the President's bill, or any raihoad bill now before Congress, but I deprecate them all. I will illustrate my reasons for this by the past condition of that part of my business (representing an investment of over $2,000,000) which is confined. to the congressional district repr^ sented by you, each plant having been operated at its full capacity dunng 1907, and the cost (based on the then cost) of wages approximated $3.25 per ton or $1 perwheel, and wages have never been lower since. The actual output which we had in the East Kensington plant was 450 wheels per day and in the West Kensington 1,050 wheels, making a total output of 1,500 wheels per day, representing a pay roll of $1,500 per month, and the output of 450 wheels in one piani ana i,uou lu ine umei, uacu lur these figures, was based on an actual output and not an actual capacity, which could easily be increased 10 per cent. Therefore, for the purpose of companson we had six hundred and seventy-two days In the twenty-eight months at an output of 1,500 wheels per day, which would have been done if conditions remained as they were, thereby representing a fair output of 1 ,008,000 wheels. As a matter of fart We manu- factured in your district 27,000 wheels in all that time and these 27,000 wheels were made at Kensington by taking theiiii from our West Chicago shops in October, 1909, 1312 BILLS APPECTING INTEBSTATB' COMMERCE. leaving a corresponding space idle there; the reason being that we confidently hoped at that time that there would be a revival of business, and we wished to prepare a unit of an organization that had been scattered for more than two years, so that when the business came, as we fully expedted,- we eould increase our organization much more rapidly and efficiently from a 20 per cent operating force than we could from a totally idle plant and no labor organization. But leaving that out of the question and deducting the 27,000 wheels we did make from the 1,008,000 we should have made leaves a total of 981,000 wheels which are forever lost to us and $981,000 in pay which is forever lost to our workingmen in your congressional district. And as the car wheels constitute but 10 per cent of the car, and all these cars are built in your district, it is not unreasonable to suppose that there was nine times as much labor lost from the other parts of the car, making in all a total of between $7,000,000 and $8,000,000, and which would have been largely distributed amongst the mer- chants and other small business men in the same district; and this is making no men- tion of the large amount of labor that is employed in other parts of the State and your district producing our raw material (notably the Iroquois Furnace Company, which supplied us with iron), and this constitutes the sole reason for our taking the active part that we have in trying to better ourselves. "We venerate the pledges of the President and the Republican party, but for our- selve^^aJidi workmen dare to plead." (With apologies to Logan.) Very sincerely, yours, T. A. Griftin. The Lake Shore Electric Railway Company, Sandusky, Ohio, February 16, 1910. Hon. Paul Howland, Member House of Representatives, Washington, D. C. Dear Sir: I wish to call your special attention to H. R. 17536, introduced in the House of Representatives by Mr. Townsend, January 10, 1910, concerning the creation of an interstate commerce court and the amendment of the act entitled "An act to regulate commerce." On page 18, lines 20 to 23, inclusive, prohibit the Interstate Commerce Commission from establishing through rates between interurban and steam roads. We feel that that part of the bill prohibiting the Interstate Commerce Commission from establish- ing joints rates between steam and electric railroads is against the interest of the travel- ing public, the patrons of the interurban railroads, and the prosperity and development of such interurban roads. The Lake Shore Electric Railway Company has many points along its railroad where passengers do not take its cars to go to a near-by town or junction with a steam railroad to make their journey, for the reason that they can not buy. a through ticket to their destination nor can they get their baggage checked to their destination, but, on the other hand, are required to travel upon the trains of our steam road competitors, who operate not more than two or three trains a day, affording very little train service as compared with the Lake Shore Electric Railway. The steam railroads working together and against the electric railroads in a case of this kind not only injure the electric railroads but inconvenience the traveling public. The traveling public under such circumstances do not get all the available benefits that are in store for them. There are also a number of points on this property where we have a large exchange of passenger traffic between this company and steam roads. In these instances it is now necessary for the travelers to purchase two tickets and have their baggage checked twice to reach their point of destination, and oftentimes are compelled to nave their baggage transferred. These travelers are therefore receiving only a part of the advan- tages to which they are entitled when, on account, of the convenience to them, they use an interurban and a steam road, while the steam roads between themselves extend these advantages to the traveling public. I wish to say, however, that we have traffic arrangements with three different steam roads whereby through tickets are sold and baggage checked in exactly the same manner as the steam roads do among themselves and in these cases the public are receiving all the benefits. Looking at this matter broadly, it would seem to us that the portion of section 9, above referred to, should be amended so as to give the Interstate Commerce Com- mission authority to order through rates and through tickets as between interurban and steam roads, if in their judgment it was proper and advantageous to the public. If I have not made myself clear on the matter, I should be glad if you will advise me and I will endeavor to explain more in detail. I trust you will interest yourself in this matter, because I feel certain that if you do 80 you can see the justice of this request. Yours, truly, F. W. Coen. Vice-President and General Manager. BILLS APPBCTING INTBESTAT^ COMMERCE. 1313 February 22, 1910. Hon. Andrew J. Peters, House of Representatives, Washington, D. C. Dear Mr. Peters: I have already sent you certain official figures from the railroad commissioners' report of Massachusetts relative to the small amount of freight or express business done by the Massachusetts street railway companies. Those figures, you may remember, showed that the receipts of the companies in Massachusetts from the sources indicated were less than 1 per cent of their gross receipts. I have now obtained similar figures, -based on the proposed census report relative to street railways. These figures are not authoritative Census Department figm'es, nor is that department responsible for them . I nevertheless believe that they are approxi- mately accurate and will be substantially confirmed by the census report on street railways when issued. These figures relate to 939 companies, and include not only street railways, but interm'ban' roads. The sources of their total operating earnings, which amount to $418,187,858, are classified as follows: ers 382, 132, 494 Chartered cars 705, 261 Freight 5, 231, 215 Mail 646, 575 Express 1, 560, 802 Sale of electric current 20, 093, 302 Miscellaneous sources 7, 818, 209 You will notice that the receipts from freight, as distinguished from mail and express, are but a small fraction over 1 per cent of the gross receipts. Including mail and express with freight, the receipts from all three sources are less than 2 per cent of the gross receipts. ' The sale of electric current is an item of some significance which may interest you. Many of the companies furnishing street railway transportation are equally electric light and power companies, manufacturing and selling electric current for use in the different cities and towns in which they also operate street railways. This would seem an additional reason for excluding street railways from the proposed legislation, if the avoidance of further complications between federal and state jurisdiction and control is desired. Sincerely, yours, Buckley W. Warren. SHORT POINTS RELATING TO LEGISLATION AFFECTING WATER ROUTES AND ILLUSTRATING THE INTERDEPENDENT RELATIONS BETWEEN FREE WATERWAYS AND FREE WATER ROUTES. [Supplement to brief prepared by Daniel H. Hayne.] 1. That the tendency toward interfering with natural, competitive, and economic law's, where there are no abuses to correct, is destructful. , ■ ^, 2. That natural and open highways should be as free to the people as the air they 3 That bound to this principle are the vehicles of transportation using such free and open highways. It is the God-given union of the ship and her husband, one and inseparable, the one dependent on the other in giving their benefits to the people. If left untrammeled by inelastic, artificial, narrow laws, they are the natural regulators 4 That such water interests operate under fundamental natural laws without unfair disadvantage or friction and with their evolutions towa,rd higher and better sta,ndards. 5. It is not cheap transportation, but prompt, efficient, and, above all, safe trans- Dortation which the people demand. , , , . j. ^r. 6 ODenine the doors to the possibility of unreasonably cheap service presents the same condition which threw so many rail lines into receivers hands ten years aw A community unable to support many competing parallel lines suffers in the end by the struegle of weaker lines for existence. , ., , „ u 7 It 18 impossible and beyond human power to improve on nature's own way by inelastic and often unwise laws, seeking by artificial, drastic, and experimental legis- lation to deal with varying complicated future economic situations which may anse. 8 This is Sect saVing that water transportation (being free of abuses an^ work- ing 'along natural lines without artificial obstruction) is surrounded by checks and balances containing their own inherent corrective rules. ; . 9 -The issue is between evolution through nature's own laws as against revolution through human interventions often established in the laws in great haste without full 23738— PT 23—10 2 1314 BILLS AFFECTING INTERSTATE COMMEKCE. consideration as to where they will lead, and, conflicting as they may be, by patches here and there through demands of special influence. 10. The commerce laws were established by the. people for their protection and to correct the then existing abuses. 11. They were not intended to establish privileges through governmental inter- vention at the instance of any transportation or special interest. 12 .They are the laws of the people and are not designed to settle differences between the carriers themselves which arise through inefficient management or through any other design. 13. There is no public demand to hamper and blight the water routes — per contra the definitely expressed policy is otherwise. 14. It seems inconceivable that there could be any such public demand without public manifestation; we must then look deeper for the cause of this harmful agitation. 15. Where no abuses exist there can be no reason for regulating laws, except those developed by natural, healthy, and free competition, nor until the public demand is unmistakable. 16. The effort is constantly being made to encourage and upbuild the merchant marine, as instance the enormous expenditure for improving channels, which will reach probably 145,000,000 and over per annum. 17. The work of prior Congresses sought means to foster and upbuild waterways and water routes, and this vast expenditure is bein^ made with that end solely in view. 18. Along other lines toward the same ends witness: (A) The great effort expended through the bureaus of navigation. (B) The conference of governors at the instance of the President of the United States. (C) The work of the Waterways Commission. (D) The work of the commission seeking the conservation of national resources. (E) The effort, indorsed by the present administration, to pay for the continuance and uplifting of the merchant marine through the means of subsidy. All of which tends to illustrate the intensive effort to remove restrictions, rather than to add them, to the great marine interest of this country, which has constantly declined through interfering laws and mistaken policies of the Government. 19. The present tendency in the proposed amendment is pregnant with peril and tends to the imminent danger of complete effacementof the independent waterroutes. 20. The time-honored policies of this Government are, through inadvertence, in danger of a revolutionary reversal, ostensibly in the interests of the people, but which may be traced to other activities. 21. Water routes have been sufficiently harassed by attempting to include them in legislation intending to correct abuses of one class of transportation without taking into consideration the vast difference between the two classes of transportation, (a) one being based on artificial, monopolized, and closed rights of way, (6) the other on natural, free, and open highways, which doesjnot lead to the abuse at which the commerce acts are aimed, but rather toward correcting them. 22. The policy of the people is to keep the vessel safe, but to facilitate her employ- ment. 23. To limit the free field of operation is such a blow at the ancient and present policy of the people that legislation to that end would excite public amazement. 24. It seems to be the popular view that any act or amendments of the commerce acts seeking to regulate the abuses of one branch of the service (the land carriers) should be kept free from hurtful embarrassment of the other class of service (the water carrier), a service vastly more complicated than that by land. 25. Whatever may be the wisdom in the further regulation sought against the land carriers, it is our sense that the water carriers should be left untrammeled by artificial laws until the methods applied against the land carriers pass beyond the experimental stage and that any laws touching water carriers should be considered separately and when all of the intricate problems surrounding the merchant marine may be fully, leisurely, and carefully investigated. SOME OF THE PHINCIPAL DIFFERENCES BETWEEN A COMMON CARRIER AND A PRIVATE CARRIER BY WATER. Common carrier by water. — A line or vessel operating between fixed termini, holding out to take freight as offered. This includes mainly regular lines with high standards and a few sailing vessels, so situated as to be possible to be reached by legislation. Private carrier by water. — A line or vessel not having fixed termini and not offering or required to accept freight unless willing to do so. This includes the wild carrier, the tramp carrier, the charterer of hull and a mass of sailing vessels and small boats. The independent regular water line is one offering high-class service on schedule with latest safety appliances, working under a differential lower than the rails. BILLS AI^FECTING INTEESTATE COMMEKCE. 1315 Private water carrier may have good or bad standards, may be in business for a day or niore, elusive and intangible, so far as the application of the law, and is not covered by the commerce act. This class includes the wild carrier, sometimes des- ignated a free lance;" the tramp vessel, sometimes designated "pirate;" the char- terer of a vessel, usually a common carrier, sometimes with its own motive power, at other times a barge or vehicle in tow, the barge being usually a private carrier, and the towboat usually but not always a common carrier, but bound only to the char- terer and not to the cargo or freight contracts. The regular water line with the high-class service the public demands having on the one side intensive rail competition, both on through and on local traffic, with the ability of the rails to offer unreasonably cheap rates at the cost of rail interior business. On the other hand, regular lines subjected to even more serious competition, through the private carriers named (not covered by the act), and irresponsible, weak, regular water lines pursuing policy of letting vessels run down with effect to lower standards of service. The rails have their local territory from which they can demand sufficient to make up for port losses. The regular water line has no strictly local business. It is all intensively competitive with all rail and also water. , Regula,r_ lines with standard high-class service must either voluntarily relinquish their position or reduce their standard under an unequal struggle for existence, unless natural economic laws are permitted to have their full and uninterrupted course. House of Repkesentatives, Washington, February tt, 1910. Hon. James R. Mann, Chairman Committee on Interstate and Foreign Commerce. Sir: Referring to H. R. 3046, now before your committee, '"requiring railroads and other common carriers engaged in interstate commerce to make prompt acknowledg- ment and adjustment of claims for overcharges on freight and for loss and injury to same," I respectfully suggest that an amendment to section 3 of the bill after the last word ("brought ") in said section, as follows, would provide for the jurisdiction of cases arising under the act, to wit: "This act shall not be construed as excluding the exercise of a concurrent jurisdic- tion of cases arising under the act by the courts of the several States." I respectfully submit that if your committee has a conviction that the bill as thus amended would be unconstitutional, of course I can not insist on a favorable report thereon. But if the committee should merely entertain a doubt of the constitution- ality, I ask that the biU be favorably reported, and if the common carriers to be affected by its operation doubt its constitutionality they can have that question decided by the courts of the country, as many other similar questions are. If the state court does not have jurisdiction of cases that may arise under the act then but few, if any, shippers could legally establish their claims, as the district federal court has no jurisdiction of claims less than $2,000. As to the necessity of Congress passing this bill or a similar one, I respectfully call the attention of the committee to the frequent and common complaints of shippers of the delay of common carriers, and more particularly of raihoads, in settling claims against them for overcharges and for loss or injury to property while in their charge. And especially do I invite the attention of your committee to opinion No. 1088 of the Interstate Commerce Commission in the case of Tyson & Jones Buggy Company against the Aberdeen and Asheboro Railway Company et al., and in which Mr. Harlan rendered the opinion, herewith forwarded for the information of the committee and marked "Exhibit A." As will be seen, Mr. Harlan intimates that unless carriers will do what is fair and just to the shippers Congress may be called on to compel them to ' Very respectfully, Geo. W. Gordon. Exhibit A. TNo 2785 Tvson & Jones Buggy Company v. Aberdeen and Ashgboro Railway Company et al. Sub- mitted September 16, 1909. Decided December 7, 1909.] 1 Complaint of an overcharge dismissed, the defendants having refunded the amount, but only after formal complaint had been made and copies served upon them. 2. Carriers criticised for their lack of prompt attention to plain overcharge claims and for their delay in adjusting them. 1316 BILLS AFFECTING INTERSTATE COMMEBCE. G. M. Stephen for complainant. Henry A. Page for Aberdeen and Aeheboro Kail way Company. J. L. Eysmans for Cumberland Valley Railroad Company. Charles Heebner for Philadelphia and Reading Railway Company. Jackson E. Reynolds for Central Railroad Company of New Jersey'. HEPOKT OF THE COMMISSION. Harlan, Commissioner: Without entering into the details of this complaint it will suffice to say that, as pre- sented on the pleadings, it involves a small overcharge upon a shipment of iron wagon axles made by the complainant in November, 1907, from Wilkes-Barre, in the State of Pennsylvania, to Carthage, in the State of North Carolina. The overcharge resulted from the inadvertent collection at destination of the fourth-class instead of the fifth- class rate, as required under the published tariffs of the defendants for a portion of the haul. The complainant, being advised of the fact that the fifth-class rate was the legal rate, made demand upon the Aberdeen and Asheboro Railway Company, the delivering carrier and principal defendant, for a refund of the overcharge.. That company, although it had collected the charges on the shipment, apparently declined to investi- gate the matter at all, and contented itself with referring the complainant to the sev- eral carriers back along the route of the movement to the point of origin. After a rather extensive but fruitless correspondence in relation to the matter the complainant called it informally to the attention of the commission. No result followed from our efforts to get the serious attention of the principal defendant to the complainant's claim. Finally this formal complaint was filed. Promptly after copies of the complaint had been served upon the defendants and they had thus been put in a position where they were compelled to look into the matter it was ascertained that the complainant's con- tention was well founded and the amount of the overcharge was at once refunded. In moving the dismissal of its petition the complainant advises us that it has a num- ber of such claims still pending with various carriers, the settlement of which it has been unable to secure notwithstanding its earnest efforts in that behalf, and it asks that some action be taken by the commission in order that shippers may secure more prompt adjustment by carriers of overcharge claims. An order will be entered dis- missing the complaint upon motion of the complainant; but we think the time has come for some comments by the commission in relation to the practice of carriers in such matters. From shippers in all parts of the country, and from local traffic associations which are maldng earnest efforts on fair and reasonable lines to secure a reform in the prac- tices of carriers in this regard, many complaints have been received during the past year of the inattention of carriers to plain overcharge claims and of their delay in ad- justing them. And a survey of these complaints has led us to the conclusion that this practice, or rather lack of practice, among carriers is open to severe criticism. A substantial portion of the time and labor of this commission is given to the effort to secure, through informal correspondence, the settlement of claims of this char- acter, and it is a burden from which we ought to be relieved by carriers. On the other hand, from the shippers' point of view, nothing in connection with transpor- tation is more vexing and irritating than the labor and delay incident to the follow- ing up of an overcharge claim and securing its repayment. When an undercharge occurs it is promptly discovered by the accounting departments of carriers when revising the billing, and demand is at once made on the shipper for payment. With equal facility overcharges are also detected by accounting officers. But from the complaints that reach us it seems to be the duty of no one in the interior organiza- tion of many carriers to see that the amount is refunded to the shipper. And when an overcharge is detected by a shipper himself, he is able in the great majority of cases, if we may form conclusions from the numerous complaints now before us, to secure its repayment only after his patience has been sorely tried by the effort and delay required in order to secure serious attention to his demand. Without wishing to be understood as ' expressing the view that this loose practice with respect to overcharge claims is characteristic of all interstate carriers, it is never- theless so common as to justify some attention by the commission. Apparently it is not understood as fully as it should be, by railroad officials charged with the adjust- ment of such matters, that the retention by a carrier of an overcharge not only has all the effects of an unjust discrimination against the shipper from whom the excess has been demanded, but leaves the transportation transaction in an unlawful condition, both under the act to regulate commerce and under the Elkins Act, until the over- charge has been adjusted. We are advised that the delay in making repayment is frequently due, not to the failure to discover the overcharge, but to the efforts of the BILLS APFECTING INTERSTATE COMMERCE. " 1317 delivering carrier to ascertain before making the refund to the shipper which carrier participating m the movement is responsible. This is not a proper practice. The shipper IS entitled to repayment from the carrier that has collected the freight charges as soon as it appears that an overcharge has in fact been made. When the refund has been made it is then that carrier's duty to see which of the carriers that participated in the movement is responsible and charge it accordingly. When the overcharge has been discovered it should immediately be repaid by the carrier that collected the charges, and thi§ should be done whether a demand has been presented by the shipper We well understand that the adjustment of claims is a matter that requires time and that they can not safely be paid until after the facts have been fully investigated. But in our judgment the claims offices of carriers should be so organized as to enable them to dispose of all overcharge claims within thirty days, except those of unusual or special character, and such claims ought to be disposed of withm sixty days at the utmost. We refer now to plain overcharge cases. The phrase "overcharge" as used by the commission embraces only cases where carriers have demanded and received a rate in excess of the published rate. We do not use that phrase in referring to cases where the publi hed rate has been collected but is alleged on one ground or another to be an excessive rate. As to the latter class of claims, many of which are adjusted informally by the commission, it seems to us that the complaints of shippers ought to be investigated and put before us fo;- disposition withm ninety days in the great majority of cases. The amended act to regulate commerce gives the commission no authority to estab- lish any limit of time for the adjustment of claims or any authority to discipline carriers that are not attentive to their plain duty in such matters. The ae^ust- ment of clairris, however, is a matter which the carriers themselves, in good faith to the shipping public, ought to take hold of so as to reach results within a reasonable time; and we shall expect the cordial cooperation of all carriers in our request that their claims departments be so organized as to give more prompt results, to the end that all occasion for the well-founded complaints that shippers now make may be removed. Carriers owe at to themselves not to put the commission under the necessity of calling this matter to the attention of the Congress and asking for power to compel them to do what, in their own interest and in fairness to shippers, should be done on their own initiative. [Order. At a general se.ssion of the Interstate Commerce Commission, held at its office in "Washington, D. C, on the 7th day of December, A-. D. 1909. Present: Martin A. Knapp, Judson C. Clements, Charles A. Prouty, Francis M. Coclcrell, Franklin K. Lane, Edgar E. Clark, James S. Harlan, commissioners. No. 278.5. Tyson & Jones Buggy Company v. Aberdeen and Asheboro Railway Company et al.] Upon consideration of the record in the above-entitled case and complainant's application to dismiss, from which it appears that the claim involved in the complaint was for reparation in the sum of 20 cents, resulting from the collection of the fourth- class rate on the shipment covered by the complaint, when in fact a fifth-class rate was applicable thereto; that upon the filing of the complaint and service of the answer, the Southern Railway Company, one of the intermediate carriers participating in the traffic in question, paid to complainant the amount of said overcharge in satisfaction of said complaint; therefore It is ordered, That the complaint in the above-entitled case be, and it is hereby, dismissed. Washington, D. C, February 2S, 1910. Hon. James R. Mann, Chairman Committee on Interstate and Foreign Commerce, House oj Representatives, Washington, D. C. Dear Sir: In response to your oral suggestion of yesterday I beg leave to make the following recommendations, addressing myself to cdmmittee print H. R. 17536.: Section 8. In my opinion, unless provision is made for reparation to shippers of the losses incurred by reason of misstatements of rates, shippers will not furnish informa- tion against raiboad officials or employees. To give this section practical effect, in my opinion it is necessary that provision be made that shippers may be reimbursed by order of the commission. . Section 9. I would respectfully call your attention to the fact that no penalty is provided in case of failure of the railways to route as per shipper's instructions. It seems to be necessary, in order to make this section effective, that a fine should be imposed upon the carrier failing to follow shipper's instructions. 1318 • BILLS AFFECTING INTERSTATE COMMEECE. Section 12. In my opinion it is of vital importance that the provisions of this sec- tion should be made to apply to competing water carriers as well as to competing railroads. It is, if possible, even more important that railroads be prevented from controlling their competitors on the water than those on the land, and the i^-owing tendency of railroads, through the ownership or control of their water competitors, to raise the rates of the latter up to the level of the rail rates is destructive of the advan- tages otherwise inherent to cities located on navigable waters. A striking example of this tendency is found in the situation to-day existing as regards the transportation of gackage freight between Chicago and Buffalo. (See report of the Chicago Harbor ommission, March, 1909.) Referring to section 4 of the act to regulate commerce as at present in force, in my opinion the words "under substantially similar circumstances and conditions" should be eliminated, inasmuch as the proviso in this section very properly places in the commission's hands the determination of what constitutes exceptional circumstances and conditions justifying the lower charge for the longer haul. Respectfully submitted. Wm. R. Wheeler, Manager Traffic Bureau of the Merchants'- Exchange of San Francisco. C) HEARINGS BEFORE THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE OF THE HOUSE OF REPRESENTATIVES ON BILLS AFFECTING INTERSTATE COMMERCE Part XXIV WASHINGTON GOVEENMENT PRINTING OFFICE 1910 COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, HOUSE OF REPRESENTATIVES. JAMES R. MANN, IRVINO P. WANGER, Pennsylvania. FREDERICK C. STEVENS, Minnesota. JOHN J. ESCH, Wisconsin. CHARLES E. TOWNSEND, MICHIGAN. JAMES KENNEDY, OHIO. JOSEPH R. KNOWLAND, Califoknia. WILLIAM P. HUBBARD, West VmoiNiA. JAMES M. MILLER, KANSAS. WILLIAM H. STAFFORD, WISC0NI3IN. Illinois, Chairman, WILLIAM M. CALDER, New Yoek. CHARLES G. WASHBURN, Massachusetts. WILLIAM C. ADAMSON, Georgia. WILLIAM RICHARDSON, ALABAMA. CHARLES L. BARTLETT, Geoegia. GORDON RUSSELL, Texas. THETUS W. SIMS, Tennessee. ANDREW J. PETERS, Massachusetts. II BILLS AFFECTING INTERSTATE COMMERCE. Committee on Interstate and Foreign Commerce, House of Representatives. The Chairman. The following letters, communications, etc., may be printed in the hearings: Interstate Commerce Commission, Washington, March J/., 1910. Hon. James R. Mann, Chairman Committee on Interstate and Foreign Commerce, House of Representatives. My Dear Sir: Complying with your request of the 3d instant, the Interstate Commerce Commission has considered the proposed amendment to the Townsend bill, referred to by you, and it is of the opinion that the one, in the following words : ' ' But this act shall not be construed to affect traffic originating and ending on the line of any water carrier," is intended to leave the traffic wholly by water, as the commission understands the law, where it is now — free from control of the act to regulate commerce and without jurisdiction of the commission. The commission sees no objection to this, but begs to suggest, in order to confine the amendment to the accom- phshment or this purpose, that there should be added to the words above quoted the following: "And transported wholly by water." The amendment will then read: "But this act shall not be con- strued to affect traffic originating and ending on the line of any water carrier and transported wholly by water." This suggestion is made because it might not infrequently happen that the entire through route would be composed of a rail line in the center with initial and delivering water service which might be performed by the same water carrier. The second proposed amendment, in the following language: "This act shall not be held to affect the limitation of liability of water carriers or water transportation as now provided by law," is, as we understand it, intended to leave the liability of water carriers as now existing; however, that may be efl'ected by the Harter Act and Carmack amendment. We see no objection to this, and it seems that the language proposed is in all respects appropriate to the end intended. . , n „ • i We take the liberty of calling attention to the following words: "A court of competent jurisdiction," in lines 17 and 18 on page 18 of the committee print of the Townsend bill, which are a part of the lajnguage of the present statute relating to proceedings to enjom the enforcement of an order of the commission. It would seem that if a court of commerce, having exclusive jurisdiction over these 1319 1320 BILLS AFFECTING INTEESTATE COMMEEOE. matters, is to be established, it would be better to substitute for the language above referred to, the following: "the court of commerce." very respectfully, Martin A. Knapp, Chairman. John Spey Lumbee Company, Chicago, February 17, 1910. Hon. James R. Mann, Washington, D. C. Deae Sie: As we have heretofore had more or less correspondence in reference to different legislation, I take the liberty to WTit,e you and tell you the condition of things here as I see them. There seems to be absolutely no confidente in the Government at the present time. The people do not know what to expect; that is, when I say the peo- ple, I mean the people I come in contact with. We expected an immense trade from the railroads. The railroads have absolutely stopped buying, except their actual wants. Now, as the railroads are the great distributors, let them stop buying and business virtually stops. At the present time the raihoads we do busiaess with have actually stopped buying, just the way they did twice before in the last ten years, and both times panic followed within a short time. I do not care how prosperous the country is if the railroads stop doing business that settles the prosperity at once, or within a short time. I do not believe any harm can be done by eliminating much of the proposed railroad legislation and give the raihoads an opportunity to work out themselves. They understand what the administration demands, and the chances are, beyond a doubt, they will work it out themselves. At any rate, at the present time, under existing condi- tions, I hope you will do your best to call a halt on radical railroad regulation in this Congress. Things have been getting worse con- tinuously for the last two months. I write you in this way regardless of the merits or demerits of the proposed legislation. The railroads are our great distributors, and it has come to a point where Congress has got to let them alone at the present time or the consequences will be with the Republican party, and we, can only judge the future by the past. I do not care for an answer to my letter. I merely want you to know the sentiment of the people the way I find it. Yours, very truly, S. A. Spey. Washington, D. C, February 19, 1910. Hon. James R. Mann, Chairman Committee on Interstate and Foreign Commerce, Washington, D. C Dear Sir : With leave had at the heariag February 7, 1 forward to you a copy of the remarks I would have made, with a form of amend- ment, relating to bill of lading House bill 17267. Inasmuch as the hearings have been closed, this is the only course left open to me to file remarks. Yours, very truly, Daniel H. Hayne. BILLS APFECTING INTERSTATE COMMEECE. 1321 Memorandum submitted by Daniel H. Hayne, of Baltimore, Md., on House bill 17267, relating to bills of lading. [Filed with leave had and obtained at the hearing Feb. 7, 1908.] To the Chairman and Members of the Committee on Interstate and For- eign Commerce, House of Representatives: With the permission of the committee I respectfully submit a few of the reasons which should be carefully considered in passing on House bill 17267, relating to bills of lading. I appear in a personal capacity, representing no special interest and having no pohcies influencing my action except in assisting in what- ever humble way I can in the correct solution of this -matter. The principles are all more or less familiar to me in view of the work as chairman of the committee which prepared the revised standard bin of lading and appearances made .before state legislatures, relating to negotiable bills of lading acts there submitted. In my investigations, I was impressed with the magnitude of the bill of lading contract which involved in the field where the revised standard form was to apply, property value of over 13,000,000,000 daily, and in all of the States over $15,000,000,000 daily. The difficulties of this committee in pronouncing decision on such an important question are fully appreciated, and I am satisfied that the committee is seeking to find what is fair and right and will firmly adhere to it. It should be borne in mind the carrier has not alone accepted the burden of the surrender clause in the bill of lading, but has further accepted the enormous burdens of all mistakes in delivery after receipt of the goods which are so great as to make the proportion of mistakes in issuing a bill of lading before receipt of the goods negh- gible. The objections from a practical point of view have been fully pre- sented. The following is addressed to securing real helpful legislation to the banks and pubhc, and still not transgress the limits prescribed by the Constitution by conferring upon the bill of lading the character of a bill of exchange, and therefore a negotiabihty not permissible to apply to a bill of lading as shown in Shaw v. Merchants' National Bank of St. Louis (101 U. S., p. 557) ; and when it is not the intention to use it as such, but merely to use it as a collateral to accompany the draft or note. In other words, it was never intended, and is not now intended, to send two fully negotiable instruments having the same characteristics in the same transaction. The main legal defects in the bill may be considered under: OONSTITUTIONALTY AND THE CONSIDERATIONS RELATED THERETO. It may be gravely doubted that the act is constitutional : First. It is a needless and improper interference with the nght of ^"se^cond. Alhed to this proposition is the relation between the States and the Federal Government. ., , -n j: i j- ^v, ^.ir. The effort in this bill is to confer upon the bill of ladmg the main essential element of a bill of exchange, i. e to cut out aU equities between priar-holders when accepted by the banks, and it wiU then tre cognizable as an instrument outside of interstate regulation, bo con- 1322 BILLS AFFECTING INTERSTATE COMMEECE. strued the unconstitutionality of the proposed act is plain. (See Nathan v. Louisiana, 8th Haw., p. 7.3.) Third: It partakes dangerously of the elements of class legislation prohibited by the Constitution. Fourth: Its ramifications, which must follow into the network of all commercial transactions, if not pernicious, are at least mis- chievous and fraught with danger. To reverse the present doctrine and say a principal is responsible for the unauthorized act of his agent is a new proposition. If it is sound here, why not apply the doctrine broadly and generally? The law-making power and the courts would be powerless to withstand the reasoning seeking such conclusion, and I apprehend the most pronounced objection to such a law would come from the banking interests themselves should they be held responsible for the act of an agent who acted contrary to his well understood grant of power. Whatever may have been the supposed power of an agent authorized to issue bills of lading, it is universally now known they have no power to issue a false bill. Certainly the public, generally, would find a boomerang of the most injurious and harmful character. Witness the following clippings from the New York Evening Post, dated March 6, 1909: The Chamber of Commerce of Rouen, France, has just issued a report concerning the abuses which have resulted from the employers' liability law, passed in 1898. This was intended merely to cover ordinary accidents to labor, but its sense has been extended to domestic servants, and a valet who should fall downstairs and break his leg would he legally entitled to claim damages from his employer. ; Now there is hardly an accident which does not fall under this rule. In the metal- lurgical and building trades the increase in accidents, causing permanent incapacity, is 100 and 250 per cent, respectively. In these cases the employer has to pay a yearly pension tor life. How could we, with reason, concede, on a broad and general view of such a question, the right of any special interest to undertake to dictate or influence what should be the character of the contract between the contracting parties to which such third interest was in no wise a party? If in this instance it is proper it would be proper for any con- templative assignee to dictate and hold up the terms of the contract until it was satisfactory to him. In general commercial transactions it would be properly suggested that all assignees were at liberty to take or refuse such contracts, but they would have no right to influence their terms. The means open to any assignee to determine the force and effect of a contract is likewise open to the banks. In purchasing a piece of property the search of title must be made. In accepting a, bill of lading the inquiry can be made as to the actual delivery of the goods to the carrier. They are all designated by marks, and this is true wherever the draft is to be paid. In the instance of the transaction being made in the same city direct inquiry may be made at the shipping point, and in the instance where such contracts are taken for collection the draft is presented for pay- ment days, weeks, or even months before the arrival of the goods. There is no requirement to pay the draft until the arrival of the goods, And in practice, the drafts are not paid until arrival of the goods. BILLS AFFECTING INTEBSTATE COMMERCE. 1323 There is ample opportunity open to the banks if they choose to ■actually see the goods, and one which, if applied, will not require reversal of the present laws. - Another very important reason why special laws should not be attempted at this time is that the whole question of transportation is being considered through bills now pending before Congress, and this being accomplished, much of the errors and confusion will be altogether avoided. I urge, therefore, that bills of this character should remain subordi- nate to the general comprehensive legislation being sought on these questions. If it is insisted that some bill should paSs relating to bills of lading then I would suggest the bill be amended in the following respects : I inclose the bill with the notations thereon as a supplement hereto. The amendments are: CLASSIFICATION OF THE PROPOSED AMENDMENTS. These amendments effect the following changes : 1. Changing section 3, section 5, and section 7, by eliminating the carrier from all the penalty clauses, but the officers, agents, or ser- vants of the carrier are not eliminated. 2. Changing section 3 and section 7 to include the shipper or the acceptor of bUls of lading in the penalties. In the fifth clause such parties were included, but in the sections here referred to they are omitted. 3. Changing section 4 by ehminating all language seeking to hold the carrier responsible for freight represented by a bill of ladmg issued by an agent without authority. , „ , ,• x ,. 4. Changing sections 4 and 5 by amplifying the word duphcate toinclude'"other words of similar import." 5 Changing sections 5 and 6 to adjust the measure ot d^nage chargeable against the carrier for any mistake of any of its officers, agents, or servants, to the contents of the bill of ladmg according to itl origmal tenor and effect, instead of attempting to include all damages of a speculative nature. . . x, /c 6. Changing section 7 by reducing the penalty against the officers, agents, or servants of the carrier for mere clerical errors from !B5,000 to $500, but leaving all the penalties for fraudulent or dishonest acts at $0 000 The civil remedy for all damage is prescribed m clause b. 7 Changing section 7 to include "or other lawful purposes A change is suggested in section 7 by adding "properly mdorsed. This omission was a plain oversight. x^uti -i;,,„ ^aV.A 8 Changihg section 8 mafang an alteration in a bill of lad ng valid only when signed by the party who originally issued the bill of lad- ing, with the consent of the holder thereof. In explanation of the foregoing suggested amendments, we may simplJy^their consideration by first considenng such of t^e changes as sLuld be made without question, namely, suggested amendments ^SugVsted 'amendment No. 2 has to do with the inclusion of the otherTarty to the contract. It seems to.be unfair and unwise to attemnt to include the carrier's agents without also mcludmg the oW party ki effecting the contrlct, when the faults are on both ■1.324 BILLS AFFECTING INTEESTATE COMMERCE. •sides and more especially on the side of the shipper who comes sub- stantially indorsed by the bank and stamped as an honest man. If the penalty clauses against the individuals are omitted it lays the doors open to increased abuses. All the penalties against carriers in the original commerce act were useless, but the Elkins amendment penalizing the individuals was effective. Suggested amendment No. 4 has to do only with amplifying the word "duplicate." As a matter of fact, there are now but two bills of lading used throughout the United States, hamely, the uniform bill of lading and the revised standard bill of lading. These are used almost universally, and there is no necessity to use the word "dupU- cate" on any copies. The use of the word "dupHcate" is fraught with great danger, as it is often omitted through clerical error. - The "uniform" and "standard bills" of lading do not permit of such error, because, instead of the risk of omission of the word " dupUcate," it is arranged that any extra copies are made on a different colored paper, which shows that the instrument is only a "memorandum," and the protection against improper issue can not be overlooked._ The word "duphcate" could well remain in the act to cover isolated cases where carriers or shippers use individual forms; but the ampli- fying of the language to include words of sinular import also covers the universal method adopted by the revised uniform and revised standard bills of lading. Suggested amendment No. 6 has to do with the reduction of fines. It seems very unfair to impose a penalty of $5,000 for mere clerical mistakes. Five hundred dollars is amply sufficient. Indeed, it ought to be very much less, as the burden of such fines would often fall on one who is not able to bear such heavy fines for the usual, every- day business errors which are bound to occur. Full civil remedy is still preserved as against the carrier in clause 6, so there is no injustice done. Suggested amendment No. 7 includes a saving clause to protect against too narrow specialization. Suggested amendment No. 8 has to do with the means of valid alteration of bills of lading. It seems very unwise to permit alteration of an original instrument by anyone except those who originally issued the bill of lading with the consent of the holder thereof. If any agent of the issuing carrier is to be authorized by law to make a valid alteration in a bill of lading, neither the carriers nor the banks would be protected against the precise conditions which are attempted to be covered in this act in other places. A little thought on this point will show that the section is ill-advised and unworkable. The sug- gested change in No. 8 seeks to apply the understanding reached in the alteration clause of the bill of lading, known as "clause 10," and this clause was worked out by the shippers, the carriers, and the banking interests in concert. This leaves suggested amendments Nos. 1, 3, and 5, for considera- tion. Suggested amendment No. 5 may well be considered alone. In all the discussion had on the framing of bills of lading between the shippers, the carriers, and the banks, the language finally accepted was that Ihe carrier should be responsible for ths contents, or the value of the contents, of the original bill of lading according to its original tenor and effect. But in this act attempt is made to depart BILLS AFFECTING IliflEBSTATE COMMERCE. 1325 from those words and include all damages and whatnot of every nature and description. The words of the act are indefinite, and also may- have the possible construction holding the carrier for more than it should be held under the contract. A carrier should be required only to transport and deliver the property, or, failing to deliver the prop- erty, to deliver the value thereof, and any additional loss the owner can fairly show. Suggested amendment No. 5 carries out the clear understanding had between the shippers, the carriers, and the banks during the discussion of the form of the bill of lading which was finally recommended by the Interstate Commerce Commission, and that language should be adhered to. Suggested amendments Nos. 1 and 3 should receive the most careful consideration. Matters of public policy and the constitutionality of the act are involved. Th? act seeks to impose penalties on the com- mon carrier when the causes are attributable to individuals. There has been nothing gained by the attacks upon carriers per se ; but much unnecessary loss has been made to the innocent stockholders in such corporations through the imposition of penalties for offenses for which such stockholders were in no wise responsible. The remedial purpose of the legislation will be fully accomplished by making the penalties applicable to the individuals who are involved in any violation of the act. The amendments included in suggestion No. 1 place the penlaties where they should be, and relieve the innocent owners of losses for which they are in no way responsible, and where they have no means of protection against th°m. The stockholders of these companies are largely individuals, trust €states, and in one notable instance of one of the largest railroads in this country, the stockholders are mostly women. Suggested amendment No. 3 should be adopted for the following reasons : The common carrier, being the distributer of goods between com- munities, permitting the interchange of commodities, is the primary source of national prosperity. The difference between cheaply made commodities in one section, interchanged with cheaply made com- modities in another section, is perhaps the primary element of national wealth. Any legislation which harmfully and unjustly affects the common carrier is mischievous, and is indirectly an attack made upon the public. Not the least is the destruction of initiative on the part of those who are concerned with these great enterprises. The carrier's assistance in the generail welfare is therefore not to be lightly considered. The welfare of the carrier and interests linked to it is another instance calling for caution. Starting with the direct employees, they are, according to recent statistics, in excess of two million. Those who have their funds invested are also an exceedingly large class and composed frequently of estates, women and oiphans. Another direct dependent is that large class of supply interests whose welfare is closely linked with transportation, some wholly dependent upon it. The banks themselves acknowledge a very large and lucrative business as a result of the voluntary act of th^ carrier in accepting the great hazards of "order" shipments, which is dis- tinctly not an incident of the act of carriage, but has been made so to accommodate others. It seems safe to say that more than one- 1326 BILLS AFFECTING INTEliSTATB COMMEKCE. tenth of the entire population is in some measure entirely dependent on th?- carrier. The following bearing should also be considered: WATER CAEEIEKS. It will be noted that the bill as drawn includes "any common carrier, railroad or transportation company," etc. This covers water transportation between the States anci between ths States and a for- eign country, whether the carrier be a common carrier or a private carrier. The transportation of goods ' ' from or between ports of the United States and foreign ports" by vessel is now fully covered by special laws affecting navigation alone and requiring th"^ giving of bills of lading or shpping documents, and the statmg therein of specific facts as to marking, number of package, quantity, weights (wh-^ther shipp?r's or carrier's), apparent order and condition, etc. These laws also prohibit th? insertion of conditions, agreements, or clauses affecting liability from certain causes, and th^. conditions under \^hich such carrier shall not be answerable for loss or damage resulting from "faults or errors in navigation or in the management" of said vessel. (Harter Act, Feb. 13, 1893.) Since the beginning of this country, transportation by land and by water have been treated as essentially different, requiring differ- ent legislative measures. The line of demarcation, so long as it is a transportation question, has been drawn at the shore line, and should remain there, and this bill, or any bill, if to be enacted, should ex- clude from its provision transportation by water. This is a popular demand, and may be said to be one of the policies nearest the hearts of the people.. They are aiming to remove burdens on their shipping, not to add them, as witness the subsidy movement, and that toward open and free waterways. The Maritime Association of the Port of New York, New Yorlc, February 2S, 1910. Hon. James R. Mann, Ohairman Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. Dear Sir: I beg to hand you below resolutions adopted bj' the board of directors of the Maritime Association of the Port of New York at a special meeting held this day, viz: Whereas Senate bill 5106 and Hc*se bill 17536, now pending before Congress, and known as an administration measure, provides, among other things, "that whenever the carriers themselves shall have refused or neglected to establish volun- tarily such through rates or joint classifications or joint rates, and this provision shall apply when one of the connecting carriers is a water line;" Whereas it is manifest that any law that has in its effect the limitation or restriction of American shipping will result in the destruction of the rail and water differential basis in injury to a great rr ass of the people of this country and an injustice to investors of a large amount of capital ; Resolved, That the Maritime Association of the Port of New York strongly protests against the passage of this section of the law for the following reasons: First: Water transportation is the rate regulator to practically the entire country, serving as it does the porta of the Atlantic coast, Gulf coast, Pacific coast, the Great Lakes, and up and down all navigable rivers. BILLS AFFECTING INTERSTATE COMMERCE. 1327 Second: While rate regulation has had the desirable effect of removing, to a great extent, unjust discrimination against various classes of shippers, it has also resulted, through the consequent consolidation of ownership of railroads, in a much less flexi- bility in rail-rate schedules. To establish this same control over all the water carriers, not only as to the rail and water traffic, but as to port-to-port traffic, will unquestion- ably result in a similar inflexibility in these rates and in the consequent deterioration of service; and be it further Resolved, That a copy of these resolutions be sent to the Senators and Members of Congress from this State and to Hon. S. B. Elkins, chairman Senate Committee on Interstate Commerce, and to Hon. James R. Mann, chairman House Committee on Interstate and Foreign Commerce. Trusting that the foregoing will receive your favorable considera- tion, I remain, Very respectfully, yours, C. R. Noeman, President. Board of Trade and Business Men's Association, Norfolk, Va., February 25, 1910. Hon. James H. Mann, Chairman House Committee on Interstate arwZ Foreign Commerce, Washington, D. C. Sir: The accompanying resolutions, which are self-explanatory, were passed to-day at a meeting of the committee on legislation of this body, and in accordance therewith I am carrying out the pro- visions therein. It is the earnest desire of the committee that you give this matter your serious consideration, as coming from a port which probably would be as seriously affected as any Atlantic port, if this bill were adopted. Trusting that I may be advised of your favorable action on these resolutions, I am. Yours, very truly, Joseph A. Hall, Secretary. Whereas the attention of this body has been directed to bills now pendmg m Congress, Senate bill 5106, introduced by Senator Elkins and House bill 17536, introduced by Mr. Townsend, proposing to amend section 15 of the act to regulate commerce " as amended June 29, 1906; and ..u t * * * Wterei if said amendment shall be enacted into law, it will give the Interstate Commerce 'Commission jurisdiction over American coastwise shippmg in their local ■^"Fkst^The stf^hip lines are the rate regulators of practically the entire country, seAdne L they do the principal port cities of the Atlantic, Gulf, and Pacific; Snd If the private carriers, tramp steamers, and sailing vessels are allowed to make rates ad libitum and without notice, and the regular coastwise steamship lines Trfforced to give stSutory notice of thirty days before any change can be made it fs manifest that the re-ular lines can not exist, and then: abandonment means the desTmctfon of the differential rate basis and deprives the port cities of the regular servke which they have so long enjoyed, and takes from the shipping and traveling niiWif the pconomv of water transportation: 1 heretore be it ResoM That the legislation committee of this body desires to go on record, as ^'R^soived fvrther That a copy of this resolution be sent to Senator Elkins, chair- 1328 BILLS AFFECTING INTERSTATE COMMEECE. that they will do all possible to prevent the enactment into law of that which can only result in injury to a great many of the shipping public of this country and an injus- tice to those who have invested large capital in American shipping. Resolved further, That the secretary be instructed to furnish copies of this resolu- tion to various trade organizations interested in traffic at Atlantic ports, with the request that they take similar action. The National Industrial Traffic League, St. Louis, February 26, 1910. Hon. James R. Mann, Ghairman House Committee on Interstate Commerce, Washington, D. 0. Dear Sir: Referring to House bill 17267, a bill relating to bills of lading, introduced by Mr. Stevens, I find therein in section 4 a pro- vision which may be construed as relieving carrier from liability for loss or damage where shipments are forwarded on bills of lading reading "shipper's load and count," although properly may have actually been delivered to the carrier. I do not beheve it is the purpose to relieve the carrier from loss or damage where shipments are forwarded on such a bill of lading, "shipper's load and count," and the property was actually delivered to the carrier, which of course would be a matter of proof. I would therefore suggest, for the consideration of your committee, a correc- tion in the last paragraph of section 4, by substituting for all of the words after the word "provided," in said last paragraph, the following: Provided, That where an order or a straight bill of lading is issued for property billed "shipper's load and count," indicating that the goods' were loaded by the shipper, and the description of them made by him; and if such statement be true the carrier shall not be liable for the nonreceipt or by the misdescription of the goods described in the bill, in which event the estoppel and liabiUty above provided shall not attach. It is absolutely necessary at times, by reason of the location of the industry or the location of the team tracks, for shippers to load cars under their own supervision, and without the service of an employee of the carrier to check the freight into the car and to issue a receipt or bill of lading accordingly. Under such circumstances it is the practice to forward such carload shipments with notation on bUl of lading "shipper's load and count." If a misstatement is made by the shipper as to the contents of the car forwarded under such conditions, then I do not believe carrier can or should be held liable for the misstatement of the shipper; but if, however, the statement contained in the bill of lading as to the number of packages and description thereof as made by the shipper is a fact, which fact no doubt would have to be proven, then the carrier should be held liable for any loss, the same as though it had actually checked the goods into the car and issued receipt accordingly. I fear the present wording would relieve the carrier of liability. The suggestion I have made is in line with the language employed in section 23 of "An act to make uniform the law of oills of lading," as recommended by the commissioners on uniform state laws. (See pp. 239-240 of the inclosed pamphlet.) Yours, truly, J. C. Lincoln. BILLS ArFBCTING INTERSTATE COMMBKOE. 1329 Washington, D. C, February 26, 1910. Dear Mr. Mann: Inclosed herewith please find copy of letter from Messrs. Farley, Harvey & Co., Boston; Mass., in regard to House bill 1491 before our committee. Yours, sincerely, C. G. Washburn. Hon. James E. Mann, House of Representatives. Boston, Mass., February 24, 1910. Hon. Charles G. Washburn, House of Representatives, Washington, D. C. Dear Mr. Washburn: On account of several disagreeable expe- riences we have had.with railroad companies, we beg to ask if you will give earnest consideration to House bill 149-1 in the matter of defini- tion of the status of sample parcels. We are tired of having it thrust upon us by railroad companies that samples are not baggage, and are carried solely by courtesy, while the railroad companies at the same moment are charging very heavy excess-baggage rates for the transportation. As an illustration of the fact, we give you an instance of the annoy- ance their rulings cause. At one time a sample trunk, belonging to us, was taken out of the baggage car at one of the stations of the New York Central and left by the railroad employees standing on the rails of a parallel track, where shortly an express train struck it and de- stroyed it and its contents entirely, although checked and in the hands of the railroad company at the time. Although we had paid the excess rate levied upon it, the railroad company annoyed us for- more than a year before they would give us any satisfaction, and then compensated us only to a very meager degree. This was all done under the rulings that samples are not baggage. They make it prac- tically impossible for us to send samples by freight, although they claim samples should be so considered, by the requirements that if sent by freight they must be cased or crated. You can imagine the impossibility of casing or crating sample trunks in connection with forwarding them from city to city through the country, even where there are express freight trains that might transport them, as is some- times the fact. Considering the fact that railroad companies in prac- tice do carry sample trunks as personal baggage and are dependent for a very large income upon the transportation of sample trunks as baggage instead of as freight, we utterly fail to see the logic of their opposition to giving sample trunks a legal status as baggage. We only know that when an accident occurs they use the argument tha,t samples are not baggage as an annoyance, always surrendering ulti-. mately when confronted by lawyers or business associations who insist upon a fair settlement of damages on the merits of the case. We certainly hope that you will use your influence as a member of the Interstate and Foreign Commerce Committee to see that the mer- chants of the country are placed on an intelligent footing m the matter. ^^ n ^, Yours, truly, Farley, Haevet & C o. 1330 BILLS AFFECTING INTERSTATE COMMEBCE. Washington, D. C, February 28, 1901. Hon. James R. Mann, House of Representatives. Dear Sir : Herein I beg to hand you a letter from Mr. W. L. McCor- mick, president of the McCormick (Grocery Company, of Euf aula, Ala. You will note he states in substance that his company sells goods to retailers at different points on the railroads; that frequently when the goods arrive at their destination the consignee refuses to receive the goods; that the law does not require the railroad to give notice of such failure to receive the goods, and the shipper is frequently charged with storage and demurrage when he at last finds out of the nondelivery of the goods. It also sometimes happens that perishable goods are not delivered, and the shipper does not find out such nondelivery until the goods are a total loss. I trust that you will remedy the matter complained of in Mr. McCor- mick's letter in some of the proposed legislation now pending before your committee. Yours, very truly, H. D. Clayton. EuFAULA, Ala., February 26, 1910. Hon. H. D. Clayton, House of Representatives, Washington, D. C. Dear Sir: While the interstate-commerce law is before the House for revision it occurs to us that this is an appropriate and opportune time to remedy by amendment a minor, but nevertheless important, phase of the present law. Under the existing law common carriers are not required to give notice to shippers of the refusal or rejection or failure to accept and remove shipments made in interstate business. Ihe shipper simply finds this out for himself the best way he can, although local railroad agents do sometimes, as an act of pure courtesy, send written notice to shippers of such refused shipments on the part of the consignee. This act of courtesy is more frequently performed where competitive lines exist. While the shipper is finding out for himself that his goods are refused, storage or demurrage charges are going on daily. The shipper has these charges to pay and there is no redress, although he has not been served with notice and given opportunity to make disposition of his goods or order returned. We have had some recent experience of this sort. We set up claim that we did not owe the charged amount, as no notice was given us. But we had it to pay, and the point was made that the law did not require such notice to us as shipper when in interstate shipments. This state of things appears to be more of, an omission than other- wise, and we feel sure you can succeed in amending the bill as needs to be. Respectfully, yours, McCormick Grocery Co., Per W. L. McCormick, Vice-President. BILLS AFFECTING INTEESTATB OOMMBKCE. 1331 Memorandum submitted by Daniel H. Hayne in re water routes. Note.— The commission has not in its reply intimated that section 9 ot the^proposed acts does not reach to the local business of water Ti 7- ^' '^^^^ ^° ™ ^^°*' ®®® P^^®® ^^' 1^' ^^^ 20 of main brief. Also kindly refer to commission ruling shown on page 20 of main, brief, which shows how the commission construes such laws. The Interstate Commerce Commission, in reply to brief presented for water lines, says : We are convinced that the authority to require such water lines as may be necessary from time to time to the formation of reasonable through routes, to the extent that such are essential to the reasonable service of the pubUc, will entail no unreasonable hardships nor burdens upon the water lines. Has this committee been advised or does any member Imow of anything "essential to the reasonable service of the pubhc" which at this time calls for this change in a policy long and constantly followed or which has not been conceded in the amendment proposed by the independent water Unes ? No commercial body, no shipper, no one save an unnamed, unin- vestigated water carrier has favored the change. Is that sufficient groimd to induce Congress to reverse an estab- lished policy to let water carriers alone until the rail rate situation is more clearly defined, and when the briefest examination of the testi- mony of the members of the commission called before the committee clearly shows they have not fully considered the question ? May we not fairly ask. Who wants this change ? Washington, D. C, March 1, 1910. Dear Sir : I have received the following letter from the Attorney- General : February 28, 1910. Daniel H. Hayne, Esq., The New Willard, Washington, D. C. Deab Sib: I have your favor of the 24th instant, with respect to the water lines. The subject is one which is in the hands of the House Committee on Interstate and Foreign Commerce, but as to which I have not had an opportunity to give any careful consideration and study, and therefore I do not feel like taking up the matter now. 1 therefore advise that you address yourself to the House committee, which is prepared, I understand, to give consideration to the subject. Faithfully, yours, (Signed) Geo. W. Wickersham, Attorney-General. In the latter part of his letter the Attorney-General refers me to the House committee, which is prepared, as he understands, to give consideration to the subject hereof. I should explain to you that the reason I took the matter up -with the Attorney-General was that I was in hopes of saving the committee some labor in the consideration of this matter, in getting the admin- istration to take it up, but it will be noted the Attorney-General states that, as the matter is now in the hands of the House committee, we should properly be 'referred to that committee, and he states that he has not had an opportunity to give any careful coiisideration and study to the matter involved. 1332 BILIiiS AFFECTING INTERSTATE COJIMEECE. This presents the matter exactly as I understood it to be, viz, that the administration has not gone into this matter. It is inconceivable that the administration, in endeavoring to pass what it believes to be a popular measure, would oppose the popular -will in respect to the water routes in the way in which the proposed legislation involves them. The matter is most forcibly presented that this legislation is work- ing through without a full consideration as to where it will ultimately land. It should not be lost sight of in this discussion that the admin- istration's anxiety directed toward passing its measures without amend- ment can certainly not reach such a dangerous involvement of water routes when there is no popular request to disturb them, and where, on the other hand, popular request is not to disturb them at this Congress and not to pass any hurtful legislation affecting them with- out the opportunity for the fullest investigation. In respect to the unpopularity of the administration's measure relating to its effect on the independent water routes, I am advised that resolutions have been passed in Boston, Providence, New York, New Bedford, Philadelphia, Baltinaore, Newport News, Norfolk, Savannah, Wilmington, N. C., Jacksonville, Mobile, Denver, Cincin- nati, Pacific coast points, and Great Lake points by the various commercial and trade organizations, and that every day popular dissatisfaction with this element in the proposed administration amendment is being manifested in resolutions and newspaper notices. The effort directed toward rail regulation may be justified by a popular requirement, but this amendment, leading into such disas- trous results to the independent water routes of tms country, is not favored by the people, and it should not be put through without giving an opportunity to see whether the people want it. Certainly the request of one or more departments of the Government should not form the basis of radical legislation of this kind, and especially since it is in the teeth of the popular Avill as expressed in prior Congresses. What the independent water lines ask (and we believe their request is backed by the mighty protest of the people) is that their statu quo under the present law be maintained until there can be a full, careful, and intelligent investigation of the water question to determine how far legislation should go in the interest of the people. It has been our privdege to read the reports of the committees, and we notice that the request was made on some of the members of the Interstate Commerce Commission to reply to the case made up for the independent water-hne interests, and I trust that interest may have an opportunity to answer any statement made by the commissioif. Of course it was a foregone conclusion that the Interstate Commerce Coinmission desired this power, as expressed (1) in the Enterprise case in 1908'; (2) in the way in which this amendment was incorpo- rated in the proposed bills; (3) in the action of certain governmental departments taking the wishes of the commission as an expression of the demands of the people; (4) in the testimony of the commission before the House committee; and (5) in the general effort of the commission to extend its power over water fines, as shown in its rufing B No. 2, May 4, 1908, where it held that being under the act BlUliS AFFECTING INTEBSTATE COMMEBOE. 1333 for through business placed the water hues under the commission's power on local business. _ We have no hesitancy in saying that the commission should not be given such a power without the definite and decisive demand of the people, nor do we believe it is the intention of the administration to force through such an unpopular law. I take the Attorney-General's letter to mean that the administra- tion would not disapprove of the change being made in the law to hold the water position in statu quo until the Attorney-General and others in the administration can have had an opportunity to give careful consideration and study to this question, and until the committees have before them all the facts and the attitude of the public on this great question. It seems, in view of all this, that the plea of the independent water lines that the effort to regulate water lines in these proposed bills has not found a sympathetic chord in the popular will; that, therefore, the step should not be taken at this Congress. Ihe amendment offered by the independent water lines will accomplish this in defining the power as to (a) through routes; (&) that the local traffic is not molested; and (c) that the great marine statutes are not repealed; for it should be noted that notwithstanding there are these two other important elements included in that amendment, viz, that the repeal by implication of the great marine statutes is not to be accomplished by this proposed legislation, and that the legislation is not intended to affect the water haul of the water routes; not a single word is said in regard to those two very important elements. I appeal to you in the interest of the people that this amendment be made, at least so the matter can come up in the conference reports to be looked over again, for as the matter stands the Senate committee has already reported the proposed bills without amendment, and I verily believe the water element is being inadvertently and hastily carried through in a measure which is aimed entirely at rail conditions. We particularly request that you do not interpret the administra- tion's attitude in putting through the railroad element of the bill under emergency conditions as relating at all to any anxiety to involve the water routes to their detriment. The Attorney-General's letter frankly states that he has not had time to look into this matter, and it is expected that the House committee will give full and careful consideration to the subject, and meet the views of the mdependent water lines if it deems it wise to do so without any reference to the administration's view as to the necessity of reporting the bill other- wise without amendment. , . • • , . Had the independent water lines and the vast shippmg mterests dependent upon them known it would have required anythmg more than the mere statement of the situation to carry conviction of the soundness of their position, an immense delegation would have been in Washington in the interest of the independent water lines. Under the pressure being put forward to put these bills through without amendment some such action seems to be necessary now, and instead of the request of one or two dissatisfied water lines seekmg to alter the whole policy of the law we are positive of bemg able to show that this action is not approved by the people of this country, regardless of sections or localities. 23738— FT 24—10 2 1334 biijLS affecting intebstate commeboe. I feel sure your interest in the public welfare is such that you would expect me to state conditions exactly as we see them, and these inter- ests are under great obligations to the care and consideration given by the House committee to this matter. It is the only place where we have as yet received anything hke a full and satisfactory hearing. This is my personal view, but I state it without reserve. Very sincerely, yours, Daniel H. Hayne, Chairman meeting of Independent Water Routes, held at Washington, B.C., February 1,1910. Chicago, March 1, 1910. My Dear Me. Mann : I have had several letters from you in regard to railroad legislation, and I am going to ask as a special favor to us that you be good enough to read the article in our February Bulletin, gage 4, and if you are sufficiently interested in the subject I should e very glad indeed if you would ask Hon. M. B. Madden to loan you the collection of papers we gave him last year on the subject of legitimate railroad rebates. The article I am asking you to read and the papers in Mr. Madden's possession will indicate to you why we are so materially interested m this legislation. Our sales are made largely to the (jovernment, States, and municipalities, and all our products are sold at delivered prices, the freight being a very material portion of the ultimate cost, and we are confident that no railroad company would attempt to make a rebate by giving the wrong tariff if a claim for adjustment had to be through the Interstate Commerce Commission. In the administration bill, H. R. 17536, the President expresses a desire to fine a railroad for an error made in quoting a rate, but there is no compensation to the shipper who has lost the money. I know you have given railroad legislation a great deal of attention, and trust you will bear with me when I cite to you a case illustrating the difficulties of the manufacturers and merchants. We bid on about 1,000 tons of material for the use of the Govern- ment; asked a railroad for the rate and were quoted $11 per ton. Our traffic manager, who we consider an expert, had already checked this as the proper rate. We were awarded the contract. When the order was sent to our works, following our usual custom, our shipping clerk applied ^;o the local agent for a rate; he telegraphed the division freight agent and it came back checked $11 and the shipment started forward. After a few cars had gone a solicitor for the railroad came to our traffic manager and told him he was making a mistake in his routing, and that if he routed the material by another gateway the rate would be lower. Our traffic manager asked him what the lower rate would be and his reply was $14.90. It is needless to say that our traffic manager got very busy. To protect himself he first went to obtain the opinion of the traffic managers of two of the largest manufacturers in Chicago. Both checked $11 as the correct rate. Fortified with these opinions he called on the general freight agent and laid the case before him. He admitted that it was too com- plicated a question for him and sent for his expert, who, after examin- BILLS AFFECTING INTBKSTATE COMMEKOE. 1335 ing the sheets, said that both rates were in error, that the proper rate was 114 per ton. It resulted in the railroad company sending one of their representatives to our ofEce to go over our files and satisfy himself that we actually sold the material based on the rate they gave us, $11, and they permitted the shipment to go forward on this construction. I could cite other cases where every possible care had been exer- cised by us as shippers but where errors have been made which we were not competent to correct and in some cases after reference to the Interstate Commerce Commission have been corrected and refund made, but only after long delays. It is impossible for any railroad company or organization to employ men who do not make mistakes, and we have no desire to penalize a railroad to a greater extent than the loss entailed, but we want the money that we have lost; we do not want any portion of it given to the United States Government. In the case I have cited, had the railroad company wanted to be unfair, they could have forced us to lose about $2,100. It is very doubtful if we could have recovered the money through the Interstate Commerce Commission. What use would a fine of $250, payable to the United States Government, had been to us ? The President is reported to have said that any other method than that suggested in the administration bill opens the way to rebates. There is no one opposed to rebates more than the railroads. No action the Government has ever taken has done the railroads and the people as much good as the stopping of rebates. If every claim for an error made must be filed witn the Interstate Commerce Com- mission thirty days before its payment and the fine for an illegal rebate remains as it is, there will never be a railroad in this country that will break that law. A rebate for a large amount would instantly attract the attention of the commission and so would rebates of frequent occurrence for any particular company, and the highest ofiicials of the railroads would not for a moment permit rebating to be practiced with such a fine as the Government justly demands. I come to you urging that you protect the shipper and trust the railroads to give the claimant no more than he deserves and make the fine apply to shipper and railroad alike, $20,000, if you please, for an illegal claim, and applying both to the person receiving it and the railroads paying it, but let there be a fine only when there is a criminal act. I am sending a carbon of this letter to Mr. Madden and Mr. Foss, as both know how interested we are in this subject, and I assure you it is an extremely important one to every shipper whether their tonnage be large or small. Sincerely trusting this suggestion may meet with your approval, I am. Very truly, yours, W. E. Clow, President. Hon. J. R. Mann, House of Representatives, Washington, D. C. 1336 bills affecttk-g it^teestate commerce. Interstate Commerce Commission, Washington, March 1, 1910. Hon. James E,. Mann, Chairman Committee on Interstate and Foreign Commerce, House of Representatives. My Dear Sir : Referring to your verbal request of a few days ago, that we examine the brief filed on behalf of the water lines and cer- tain statements made before your committee in opposition to the inclusion of water carriers in the provision of law authorizing the commission to establish joint through routes and rates: We have examined this brief and statements referred to and we are fuUy con- vinced that every consideration of public necessity and convenience which justifies the requirement of a railroad to biecome part of a joint through route, in connection with others, applies with equal force to water lines. We are also convinced that the authority to require such water lines as may be necessary from time to time to the for- mation of reasonable through routes, to the extent that such are essential to the reasonable service of the public, will entail no unrea- sonable hardships nor burdens upon the water lines. Therefore, without repeating here the arguments in favor of such reasonable through routes, all rail or rail and water, as from time to time may be found necessary in public interest, we adhere to our recommenda- tion that the water lines be not excluded from this provision of law. Yours, very truly, Martin A. Knapp, Chairman. Worcester Branch, National Metal Trades Association, Worcester, Mass., March 1, 1910. Hon. Charles G. Washburn, Washington, D. C. Dear Sir: Herewith please find inclosed copy of a resolution drawn up by a special committee appointed by the executive board of the Worcester branch. National Metal Trades Association. Trusting you will give it your consideration, we are. Yours, very truly, Worcester Branch, N. M. T. A. P. S. — Will you kindly draw this letter and resolution to the attention of the chairman of the Committee on Railroads ? — Whereas the purchasing power of the raihoad companies has been reduced by reason of hasty and ill-considered legislation in certain parts of the country; and Whereas some Worcester industries have been adversely afiected thereby: Therefore be it ^ Resolved, That the Worcester branch of the National Metal Trades Association deprecates the hasty enactment of legislation hostile to railroad companies, and records itself as in favor of deliberate consideration of proposed legislation, to the end that fairness may be shown to the railroads, while at the same time properly safeguard- ing the interests of the people. Edward M. Woodward, Charles E. Hildreth, Committee. February 23, 1910. BILLS APFBCTIHG INTERSTATE COMMEECE. 1337 Inteenational Apple Shippers' Association, „ -r TT. ,r Chicago, in., March 2, 1910. Hon. Jajmes R. Mann, Chairman Committee on Interstate Commerce, House of Representatives, Washington, D. C. ^?,f^ ^ie: Referring to the House bill 17267, being a bill relating to bills of lading. This bill has been under consideration by your committee, and on behalf of the association which I represent, and that association being engaged in the handling of a crop that for the current year totals approximately 150,000 carloads, I desire to pro- test against the last clause of section 4 of this bill. The clause protested is that clause which endeavors to reheve the common carriers of liability under a shipper's load and count notation on their bills of lading. We protest that it is the duty of the carrier to know for what the bill of lading was issued, and that it is their duty to know that the bill of lading represents the actual count of packages within the car. Should the provision as made in section 4 become a law the shipper would be absolutely robbed of protection, and the granting of such Erivilege to the carrier is but relieving them of the ordinary burden orne by every business man in the transaction of his business. It is our belief that such legislation would be pernicious in the extreme, and that calm thought must point out to your committee the dangers that would follow its indorsement. In the hope that before your committee reports the bill this clause may be stricken from it, I am. Yours, truly, Wm. L. Wagnee, President. Illinois Manufacturers' Association, Chicago, MarcJi 2, 1910. Some of our people would like very much to have a provision in- serted in the biil amending the interstate-commerce law to the effect that carriers should be responsible for the samples carried by traveling men. As I understand the situation now, the samples are neither baggage nor express, and when lost the owner is unable to recover from the railroad. Very truly, yours, John M. Glenn. Hon. James R. Mann, House of Refresentatives, Washington, D. C. Philadelphia, Pa., March S, 1910. Hon. James R. Mann, Chairman of the House Committee on Commerce, Washington, D. C. Dear Sir : I wish to go on record in favor of the administration bills. Senate No. 5106 and H. R. 17536, now pending before Congress, as in my judgment they are in the best interests of the water lines. 1338 BIULiS AFFECTING INTERSTATE COMMERCE. The opposition to the bills is led and being pushed by lines owned and controlled by railroad interests, who are striving to throttle the entire Atlantic coast business, and their interest is to prevent the develop- ment of all competition on the Atlantic coast. The time has come that the independent water lines must have some protection from the railroad influence, otherwise their utility or public benefit is de- stroyed. The indorsement of the various exchanges and others cuts no figure in this matter, as it is all brought about by the same railroad interests. Yours, truly, F. S. Groves, Agent. Philadelphia and Gulf Steamship Company, PJiiladelpJiia, Pa., March 3, 1910. Hon. James R. Mann, Chairman of the House Committee on Commerce, Washington, D. C. Dear Sir: I wish to go on record in favor of the administration bills, Senate No. 5106 and H. R. 17536, now pending before Congress, as in my judgment they are in the best interests of the water lines. The opposition to these bills is led and being pushed by lines owned or controlled by railroads interests, who are striving to throttle the entire Atlantic coast business, and their interest is to prevent the develop- ment of all competition on the Atlantic coast. The time has come that the independent water fines must have some protection from the railroad influence, otherwise their utility or public benefit is destroyed. The indorsement of the various exchanges and others cuts no figure in this matter, as it is all brought about by the same railroad interests. Yours, tvuly, F. S. Groves, President. Washington, D. C, March 3, 1910. Hon. James R. Mann, House of Representatives. Dear Sir: Inclosed is statement, hastily drafted, which is in- tended to be self-explanatory. As you have easily discovered, I am not a lobbyist. This is my first request of any legislative body; and I would not make this if it did not seem to me wholly just in partic- ulars which in your very busy life I fear you have not been in real position to weigh. I have mailed copy to each member of the committee. I shall not take your further valuable time. If you and your committee can see your way to consider the Subject, I feel sure it must meet your approval as fair men. In any event, I beg to thank you for such courtesy as you have shown and may show. Senator Warner and Congressman Borland can furnish informa- tion about me personally, as can others, if desired. Yours, very truly. Grant I. Rosenzweig. BILLS AFFECTING INTERSTATE COMMERCE. 1339 H. R. 16312. Interstate commerce. Transportation in contracts of news companies. To the honorable Committee of the House of Representatives: This is neither a petition for a gift nor a grab. It is presented once for all on behalf of nearly all news companies in the country, on the theory that you would hear a proposition from one mouth rather than repetition from a dozen. We want only a hearing. After that justice wul so handle us as our deserts in your good judgment may merit. We write briefly and hastily instead of talk, though we would prefer a talk, at the kind suggestion of your chairman. We, the news companies, do not want free transportation. We expect to pay for it. We want the right to contract and pay for transportation so far as necessary for our business and to the better- ment of the service for ourselves, the railroad, and the public. The news company is misunderstood. We are the people who sell news- papers, peanuts, candy, books, cigars, sandwiches, fruit, etc., on trains and in railroad stations, and operate most of the station dining and lunch rooms. We are obliged to give the public fresh merchan- dise, kept clean and wholesome, through employees tidy and polite, by utensils wearing out, ice boxes constantly needing cleaning, sep- arated hundreds of miles from sources of supply, subject to countless interruptions of sickness, abandonment, etc. To efficiently serve the traveling public its needs, while in transit, is a labor of such tremen- dous detail and so different from operating the railroad proper that while various railroads have in the past themselves attempted to per- form it, it is not unsafe to say that no railroad has without financial loss accomplished it. Hence the railroads farm out the task — they let it out to the highest bidder. The news company furnishes the materials, the men, and the service. The railroad furnishes space in stations and cars. They make a contract for division for this divided service, either on a percentage or a fixed basis, as may be agreed. The contract obligates each side to do its part, and the railroad part of the compensation is sometimes as high as $50,000 per annum. The railroad in letting the contract deals with that news company which will do the work upon the most advantageous terms to the railroad, just as the railroad lets a contract for the building of a bridge to that contractor who will furnish the bridge at the lowest figure. We do not get transportation under such a contract in any sense gratis. We pay $50,000 for it. To this method of doing business there never has been or can be any just objection that it is imfair, discriminatiag, or subversive of principle. ,• i xi, u* But the present law, whose framers doubtless gave httie thought to the inconspicuous services of the news company, forbids the includ- ing of transportation in such contract in that clause of the law which forbids transportation to all but "newsboys on trams/' On that account a news company can not from its warehouse at Kansas City send food, fruit, newspapers, books, or cigars to the newsboy whose train starts from Shreveport, although such transportation should be included in the contract, but such news company must pay full trans- pbrtation rates for its supphes, inspectors, and substitutes to take the place of those who are sick. This added burden to the news company 1340 BIUjS ArPBCTING INTERSTATE COMMERCE. threatens to result in one of two things — either to put the news com- pany out of business or raise the prices to the traveling pubHc. It has been said to the writer that the same necessity for transporta- tion which exists in the news business exists also in nearly every other business, and the coal business and milk business were mentioned. But the coal and milk lines of business serve the general public, while we serve only the traveling pubhc; and our work is not finished, by delivering coal or milk to the railroad, for we are bound to continuous service and constant alertness from minute to minute, tracing our materials into the very hands and mouths of the traveling public. After careful study we venture to assert that no principle announced by the commerce commission is different. While the commission has held that the act which authorizes transportation for newsboys on trains excludes by inference all other transportation, no principle announced by the commission forbids the amendment of this unfor- tunate and too narrow language of the act. For example, transpor- tation was forbidden to the officers of a transfer company, not because of any contract relation, but because the transfer company was not a railroad company within the meaning of the act, and hence could not claim tne personal exchange of passes, as in the case of two railroad presidents. No contract relation to serve the general public appeared in that ruling. Agents for insurance, oil, watches, refrigerators, immigration, etc., may well be denied trans- portation without infringing on the news company, since in each case ruling upon those subjects the commission takes pains to recite that those concerns are not dealing with the traveling public for the wants of the traveling public direct, but, on the contrary, are not only exceedingly remote from the traveling public, but are further in the business of dealing with the general public as a whole rather than with the comparatively small part of the public engaged in traveling. If any of the agencies engaged in transportation could come into more direct, more immediate, and more exclusive contact with the traveling public than the news company we are unable to see it. The principles which apply to the news company as a direct and immediate servant of the public in transit ought not, by any forced construction, be derived from principles governing lines of business which do not in any manner or degree stand in similar relation. It has also been said to the writer that such tfansportation is liable to abuse. Any law in the world is liable to abuse. The privi- lege of jury trial and the franking postal privileges extended to Members of Congress and murder laws are all liable to abuse and violation. News agents, officers, and inspectors, and commercial traveling men of wholesale houses are not likely to travel over their accustomed routes for pleasure. The transportation privileges in a news contract are guarded by additional features. All parties are liable to a penalty. If the news company should endeavor to transport improper persons or property, the railroad would lose revenue, and the news company would not only be called sharply to account, but in all contracts the railroad reserves the right to cancel the contract for violation, which would not only destroy the ability of the news company to do all business, but would render the large investments which it holds at various stations of absolutely no value. The news company therefore is watched by the law, by the railroad, and is liable to such forfeiture of freedom, money, and BILIiS AI'FECTING INTEBSTATB COMMEKCB. 1341 property as renders abuse of transportation privilege so dangerous as to be outside of all contemplation. In short, there are more safeguards against abuse by the news company than pertains to almost any other law that occurs to our mind. Now in what class ought the news company properly be placed ? Certainly a news company is not like a milk company, sliipping its milk to a great city for consumption, not merely by the traveling pubUc, but by the entire city. The news company really performs for the railroad a function which the railroad might itself perform, if the railroad could do it so well, ministering to the traveling public in ways asked by or useful to the traveling public while in transit. For if not useful to the traveling public the traveling public would not patronize us. If a dining-car company can inspect its cars, to see that its linen is clean, food wholesome, servants polite in the dining car, why is the same right denied to the news company whose em- ployee serves the less affluent patron in the day coaches? If the sliced orange sold in the dining car at 25 cents is transported to the dining car under a general contract between the dining-car company and the railroad, why should the same right of contract be denied to the news company which sells the same fruit in the day coach at 5 cents? But the right to include the feature of transportation is denied to the news company. If the 15-cent cigar in the dining car may be covered by contract, why not the 5-cent cigar in the common smoker or the station waiting room ? What is the difference between transporting books in the Pullman for the convenience of Pullman passengers under contract between the railroad and the Pullman Company, and, on the other hand, the books in the common news butcher's basket ? Why can the cake on the dining-car table be cov- ered by contract, which is denied to the biscuit in the day coach? Why is ice cream more soothing to the adult palate than the stick of candy in another part of the train to quiet the impatience of the children? Wherein does the handsome woodwork of the Pullman delight the eye and mind of a first-class passenger more than the pic- tures and trinkets of the news company the eye and mind of a second- class passenger in the day coach ? Be it especially understood that the news company does not object to or exclaim against any of these features relating to the more favored companies, as in the case of a dining car, sleeping car, or express car. On the contrary, the news company thinks them right. The news company only thinks that the news company performs, in its way, the same direct "and useful service to one class of the traveling public which is performed by the other companies to those parts of the trav- eUng public which are their patrons. The news company only thinks that it has been left ovi, by accident, oversight, and misapprehension of a line of business which the lawmakers have had little reason or opportunity to take under their fair consideration. It has been accepted as good doctrine by the commerce commission, in its Bulletin 4 of Conference Euhngs, at page 58c, and by the coun- try generallv that contracts for bridges, construction, etc., may prop- erly include^transportation "to contractors for materials, supphes, and men * * * provided such arrangements * * * are made part of the specifications on which the contract is based and of the contract itself." The dining car, sleeping car, eating house, and service of the news company bear the same relation to the ease, happiness, and sustenance of the operation of the railroad that good 1342 BILLS APFECTTNG INTERSTATE COMMBECE. bridges and roadbeds do to its construction. If it be logical upon principle to include necessary transportation in a building contract, why is it illogical to include it in an operating contract ? If a bridge company can build a bridge and maintain it and include in its con- tract transportation for men, materials, and inspectors to see that, with lapse of time, the iron rods remain safe and strong, why can not a news company in a similar way include in its contract the indispen- sable transportation for its daily and weekly inspectors to see that its ice boxes and wares are kept sanitary for the health of the railroad patrons ? The fact that many other hnes of business are asking for alleged similar rights of contract do not make those lines similar to the news - company. Our differentiation is based on the indisputable fact that we are not merely collaterally, but immediately, in contact with the traveling public, directly serving its wants, both useful and indispen- sable, and which if not done by the news company under contract with the railroad company must, or at least could be, done by the railroad itself. And be it further remembered that we ask no further contract for transportation than is absolutely necessary for efficient service to traveling public. We therefore ask for the news company some such provision to be inserted in the law as applies to general contractors and following the same language, viz: Parties vending food, refreshments, and merchandise to the travel- ing public, on conveyances and at stations, under lease or contract with the carrier, may be furnished transportation for men and supplies, so far and only so far as reasonably necessary for the serving of the trav- eling public and on condition that such transportation is made a part of the specification and consideration on which the contract is based and of the contract itself. Forbearing to extend this matter at further length at this time, but believing that the foregoing may serve as an outline, and standing ready to furnish any additional information, if the subject is not really itself apparent, the foregoing is earnestly submitted on behalf of the Brown, V an Noy, Crescent, Parker, and Union News Companies, oper- ating on nearly all of the railroads of the country. Very respectfully. Grant I. Rosenzweig, 1311 Commerce Building, Kansas City, Mo. Washington, D. C, March 3, 1910. Newport News Chamber of Commerce, • March 1, 1910. Hon. James R. Mann, M. C, Washington, D. C. Dear Sir: At a meeting of the directors of the Newport News Chamber of Commerce the inclosed resolution referring to Senate bill 5106 and House bill 17536 was adopted, and the writer requested to forward a copy of same to you. Very truly, yours, W. E. Cottrell, Secretary. Whereas the attention of this body has been directed to bills now pending in Con" Sress, Senate bill 5106, introduced by Senator Elkins, and House bill 17536, intro- uced by Mr. Townsend, proposing to amend section'15 of the act to regulate commerce aa amended June 29, 1906; and BILiS AFFECTING INTERSTATE COMMEECE. 1343 Whereaa if said amendment shall be enacted into law it will give the Interstate Commerce Commission jurisdiction over American coastwise shipping in their local port-to-port traffic : First. The steamship lines are the rate regulators of practically the entire country, serving as they do the principal port cities of the Atlantic, Gulf, and Pacific; Second. If the private carriers, tramp steamers, and sailing vessels are allowed to make rates ad libitum, and without notice, and the regular coastwise steamship lines are forced to give statutory notice of thirty days before any change can be made, it is manifest that the regular lines can not exist, and their abandonment means the destruction of the differential rate basis, and deprives the port cities of the regular service which they have so long enjoyed, and takes from the shipping and traveling public the economy of water transportation: Therefore be it Resolved, That this body desires to be recorded as opposed to any legislation which will restrict the merchant marine or deprive this port of the advantages which accrue to it from the regular coastwise steamship service. Resolved further, That a copy of this resolution be sent to Senator Elkins, chairman of the Senate Committee on Interstate and Foreign Coinmerce; to the Hon. James R. Mann, chairman of the House Committee on Interstate and Foreign Commerce; and to the Senators and Members of Congress from this State, with the request that they will do all possible to prevent the enactment into law of the bill, which can only result in injury to a great mass of the shipping public of this country and an injustice to those who have invested large capital in American shipping. Recommendations to the National Congress adopted by the Trans- Mississippi Commercial Congress, Denver, Colo., August 16-21, 1909. To Hon. WiUiam H. Tap, President of the United States; Hon. James S. Sherman, Vice-President of the United States; Hon. Joseph G. Carir- non, Spealcer House of Representatives; and the Members of the National Congress: Sirs: At the twentieth annual session of the Trans-Mississippi Commercial Congress, held in Denver, August 16-21, 1909, all the States and Territories west of the Mississippi River being represented, including representatives from Alaska, Hawaii, and the Philippine Islands, numbering in all 2,106 delegates, the following recommenda- tions to the National Congress were adopted: ******* INTERSTATE COMMERCE. CONTROL OF HATES AND CHARGES. Resolved That we indorse and encourage the uniting of the shipping interests of the West and Southwest in the efforts to secure reasonable freight rates to and from Gulf ports, and that we urgently request the Congress of the United States to pass an act at its next session placing under the jurisdiction of the Interstate Commerce Com- mission the control of rates and charges for the transportation of freight and passengers on steamships engaged in the United States coastwise trade, so as to prevent combina- tions which will hinder a free movement of traffic through natural channels; and REASONABLE THROUGH RATES. That we favor the securing of reasonable through rates between the Atlantic sea- board and trans-Mississippi territory, based upon fair rates to and from Gulf ports and call upon the representatives in Congress from the trans-Mississippi region to aid in enacting such legislation as will speedily result m the accomplishment of these ends. ADVANCE IN RATES. That the Congress of the United States be, and the same is hereby, memorialized to enact a law which shall prohibit any railroad company from advancing interstate rates fires and charges, except upon approval of the Interstate Commerce Commission StCT notice thereof to interested parties in such cases as the commission shall deem necessary; and. 1344 BlliS AFFECTING INTERSTATE OOMMEBCE. That all parties having the right to complain of any proposed advance in ratea, whereupon it shall be the duty of the Interstate Commerce Oommission to suspend the taking effect of such proposed advances until an opportunity shall be afforded the interested party to be heard; and, That the Interstate Commerce Commission shall be authorized to suspend in all cases any changes in the tariffs covering rates, fares, and charges, or rules and regu- lations respecting the same, pending any investigation which the commission deem necessary to determine whether the same are just and reasonable. • INSUFFICIENT SERVICE. That we indorse the bill pending in the Congress of the United States known as the " Culberson-Smith car and transportation service bill," and believe the enactment of said bill will remedy the evils resulting from insufficient service in transportation of live stock, and we hereby recommend its passage. THE SHORT AND THE LONG HAUL. That we urge upon all Senators and Representatives to the National Congress at Washington representing trans-Mississippi territory their full support to secure the passage of a law at the next session of Congress to the end that transportation companies shall be prohibited from charging a greater rate for transporting freight, passengers, or express for shorter than for longer distances over the same route in the same direction, the charge for the shorter distance to be wholly included in the charge for the longer distance. COMPULSORY QUOTATION OP RATES. That we recommend that the Congress of the United States enact an amendment to the act to regulate commerce requiring railroads to quote freight rates in writing when so requested by any shipper, and that rates so quoted be protected to avoid loss to shippers, and assessing a reasonable penalty against the carrier making the misquota- tion, so that the provision of the act against rebating may be kept inviolate. COMBINATIONS IN RESTRAINT OF TRADE. Resolved, That we approve of the State and National Governments to punish and suppress combinations in restraint of trade and competition. Madison, June 7, 1909. Hon. Joseph G. Cannon, Washin0on, D. C. Dear Sir: In compliance with a request of the legislature, I have the honor to transmit herewith copy of joint resolution No. 49 A, memorializing Congress to enact a law providing for physical valua- tion of railroads. Very truly, yours, J. A. Frear, Secretary of State. Per Karras. [Joint resolution No. 49A.] JOINT RESOLUTION Memorializing Congress to enact a law providing for physical valuation of railroads. Resolved by the assembly, the senate concurring, That the Congress of the United States be requested to enact a law providing for the physical valuation of all railroad property to form the basis for fixing the rates and charges for service by railroads. Resolved, That the secretary of state is hereby directed to forward a copy of this resolution to the' President of the United States and to each Member of the Congress thereof. L. H. Banchopt, Speaker of the Assembly. John Strange, President of the Senate. C. E. Shaffer, Chief Cleric of the Assembly. F. E. Andrews, Chief Clerk of the Senate. BILLS AFFECTING INTERSTATE COMMERCE. 1345 Spokane Chamber of Commerce, Hon. Joseph G. Cannon, ' ^^'^'''^'' ^^^ ^^' '^^^- Sfeaker House of Representatives, Washington, D. C. Dear Sir: I have the honor to submit herewith an expression of this association as embodied in the inclosed resolutions, and would respecttuUy request your early consideration of same. ihis association is composed of 750 members, representing every phase of the commercial life of Spokane, and the resolutions hive the unanimous approval of the members. Yours, very truly, L. G. Monroe, Secretary. May 18, 1909. W hereas mutual confidence and stable business conditions are necessary as between shippers and the common carriers to the future welfare of the nation: Therefore be it KesotAjed by the Spokane Chamber of Commerce and the Spokane Merchants' Associa- tion i.ha.t we most earnestly indorse and recommend to Congress the passage of amend- ments to the interstate commerce act, which shall give to the Interstate Commerce Cominission, in its discretion, power to suspend the taking effect of proposed advances in exisUng rates, or rulee affecting rates, upon a prima facie case being made showing the unreasonableness of such proposed advances in rates or changes in rules pending a hearing; which shall give to the shipper the right to route his freight where through routes and through rates are provided for in joint through tariffs, should he desire to avail himself thereof; and which shall require carriers to quote rates in writing upon application, and upon request to insert rates in bills of lading. Respectfully submitted. Spokane Chamber of Commerce, By D. T. Ham, President. Attest: L. G. Monroe, Secretary. Spokane Merchants' Association, By A. M. V. CuMBR, President. Attest: J. B. Campbell, Secretary. Unanimously adopted by both associations this the 18th day of May, 1909. National Board of Trade, organized 1868. [Extract from the records o( the fortieth annual meeting of the National Board of Trade, held in Washington, D. C, January 25, 26, 27, 1910.] FEDERAL ANTITRUST LAW. Whereas the present federal antitrust law (act July 2, 1890) was not intended to apply to common carriers engaged in interstate com- merce, nor to ocean transportation; and Whereas the construction placed upon the said law by the courts has sustained the most radical views as to the intent of said law, and in anticipation of the ultimate confirmation of such construction of the law the gravest fears as to the effect of same upon the business interests of the country are aroused in conservative quarters, and serious proposals are being made for the amendment of the law by the introduction therein of some expression limiting its operation to prevent contracts and combinations in restraint of trade, which, when sound principles of public policy are applied, can not bear the test of reasonableness; and Whereas the main purposes and intent of the law was unques- tionably to prevent contracts and combinations injurious to the 1346 BILIS AFFECTING INTERSTATE COMMEECE. public and to conserve the best interests of all the people, and was not intended to check progress or hmit industrial development and activity or the, extension or railroads and other instruments of com- merce: Therefore be it Resolved, That while the fundamental principle and purpose of the law should be preserved so that it will effectively prevent contracts and combinations injurious to the people's interests, it should be so amended and modified that its operations will extend only to prevent and destroy contracts and combinations which are thus injurious; And be it further Resolved, That said law should be so amended that it shall be per- mitted to common carriers engaged in interstate commerce to make agreements for the maintaining of reasonable rates and practices, and that ocean carriers may be permitted to make proper traffic agree- ments, provided that such agreements shall be subject to the approval of the Interstate Commerce Commission, after notice to the public, and hearing thereon. True copy: Frank D. Latume, President. Attest : J. P. Tucker, Secretary. Whereas expressions of opinion of various organizations inter- ested in commerce affairs have been solicited by Members of Congress in relation to the proposed amendments to the act to regulate com- merce, as set forth in House bill 17536, dated January 10, 1910, commonly called the "Townsend bill;" and Whereas the Chicago Bar Association has been asked to express its views with reference to the proposed amendments to the act to regulate commerce: Now, therefore, be it Resolved hy the Chicago Bar Association, iy and through its hoard of managers, That in the judgment and opinion of said association the proposed amendments to the act to regulate commerce should include a provision permitting either party to a proceeding before the Interstate Commerce Commission to appeal to the proposed court of commerce and from it to the Supreme Court of the tfnited States, and further permitting any complainant in a matter pending before the Interstate Commerce Commission to appear and be heard either in person or by attorney in any proceeding pending in the proposed court of commerce or in the Supreme Court of the United States in which is involved the enforcement or nonenforcement of the order of the Interstate Commerce Commission entered in the cause in which said complainant is a party. Further resolved, That the Secretary of the Chicago Bar Associa- tion be authorized and directed to send a copy of these resolutions to the two Senators of the United States from the State of Illinois and to the Members of the Congress of the United States living in the city of Chicago. I hereby certify the above and foregoing to be a true and correct copy of a resolution adopted by the board of managers of the Chicago Bar Association at a meeting held on Monday, January 31, 1910. Farlin H. Ball, Secretary of the Chicago Bar Association. Dated February 2, 1910. bills affecting interstate commeece. 1347 Railroad Commission of the State of California, San Francisco, December 16, 1909. Hon. Julius Kahn, Member House of Representatives , Washington, D. C. Dear Sir: This commission is in receipt of a letter from the rail- road commission of Tennessee asking that we urge an amendment to the interstate commerce laws which will permit of the transporta- tion companies issuing free interstate transportation to the members of the state railroad commissions and their employees while on official business. We feel that it would be of great benefit to the pubhc if members of the different state railroad commissions throughout the Union would meet as often as possible and exchange views and ideas with reference to their work; in this way the work of the different com- missions would become more uniform. The National Association of Railway Commissioners now meet once each year at some point in the Union and from which good results are obtained, but the meet- ings are not as generally attended as they should be owing to the great expense, some of the commissioners having to personally pay their expenses; in a great many of the States the appropriation for contingent expenses is very small and insufficient. We would therefore respectfully ask that you give this matter some attention and, if possible, have such an amendment passed. We would be pleased to furnish you with any further information in the matter that you may desire. Respectfully yours. Railroad Commission of the State of California, By W. D. Wagner, Secretary. GouLDER, Holding & Hasten, Cleveland, Ohio, February 21, 1910. Hon. James R. Mann, House of Representatives, Washington, D. C. Dear Sir: From such investigation as I have been able to make, and from report, I conclude there is no present purpose to deal with transportation by water generally, or to change the status ol water carriers. In this bUl (H. R. 17536, now 21232), however the proviso of section 15 of the present law, limiting the authority oi the commis- sion as to compelling through routes and rates to cases where no reasonable or satisfactory through route exists," is ehmmated, and authority would be given, if enacted m this form, to compel through routes and rates by raU and water regardless of the number of satis- factory routes existing. ,. . As the water carriers generaUy are not asking for this at this time, and there does not appear any public demand for it, would it not be weU to restore the proviso as to water carriers, leaving them as they are until- the relation of the rail-owned water fine is more clearly ' "^^There is, however, this consideration: It is evidently the desire of the commission that in their regulation of the railroad rates and routes 1348 BILLS AFFECTING INTERSTATE COMMERCE. they should have some control as to the making of a through route and a through rate by rail and connectiag water line, so that the pub- lic may get the proper advantage in through routes and through rates of the water and rail accommodations. This does not seem unreason- able if confined within proper limits, but in dealing with the water part of the transportation there are so many elements to be considered that, without the fullest investigation of conditions, general legisla- tion is dangerous and likely to break down the advantages by dissi- pating them. Mr. Daniel H. Hayne, of Baltimore, well schooled in the situation and qualified, I understand, has suggested an amendment or amend- ments, accompanied by full brief, as foUows : PAfter the word "character," page 19, line 10, of S. 5106, and page 18, line 23, of H. R. 17536, insert: "And provided, that this act shall only apply to a water carrier where no reasonable or satisfactory through route by rail and water exists; but this shall not exclude the power to establish a through rail and water route where a reasonable or satisfactory through route by rail exists; and this act shall not be construed so as to in anywise affect such water carriers' water traffic; and any transportation by water effected by this act shall be subject to the laws and regulations applicable to trans- portation by water." This makes pronounced this feature : That where there is no reason- able or satisfactory through route by rail and water, the commission shall have authority to make such. I am not sui-e but that this amendment would aid in the ultimate solution of the relation between rail and water transportation; it would at least make certain that the advantages of water and rail transportation are held in mind. If the rail carriers are to be prohibited from engaging in transporta- tion by water with the freedom which an independent hne should enjoy; that is, one not owned or controlled by a railroad company as contrasted with one so owned, then by reposing in the commission authority to establish one "satisfactory" rail and water route, the public would get this advantage and it would not be open to a rail- road company to establish its own water line, and so hamper the inde- pendence of other water lines and deny to the pubhc the natural advantage. While I would prefer that the question of the relation of rail and water transportation should be dealt with when attention is not so greatly diverted to other matters as in the present bill, it seems to me that the amendment proposed by Mr. Hayne and which is being largely and will be more largely circulated, would accomphsh a' real good. The fact is that the independent water lines are now so much con- trolled in their through business by the dictation of rail lines that it is dangerous for independent water lines to touch the matter until the attitude of the people and of Congress has been definitely declared on the rail owned water line question, which is now somewhat in the air. There is then open the public question as to what facilities the land carriers may be compelled to give to independently owned water carriers so as to preserve the natural benefits of water trans- portation to the people and to preserve also the rate-regulating in- fluence of the water lines. In any event, if it shall be concluded wise not to deal with this proposition at this time, and it would seem to me most unwise when attention is diverted and there are other public purposes in view. Congress should at least make it definite that the present intent is not to interfere with^ the laws applicable to trans- BILIS AFFECTING INTERSTATE COMMERCE. 1349 portation by water, and definite language might and should be in- serted to show this purpose; the matter not to be left to the un- certainty of construction by the commission. If the above amendment can not be made at this time, I suggest that the following be inserted after any provision as to water trans- portation: And this act shall not be construed so as to in anywise affect such water carriers' water traflBc, and any transportation by water affected by this act shall be subject to the laws and regulations applicable to transportation by water. The advisability, if not necessity, for such amendment will be apparent if you will examine section 3 of the act of February 13, 1893, commonly known as the "Harter Act," section 4282, 4283, Revised Statutes, and section 18 of the act of June 26, 1884. I do not go into the matter in detail because you are familiar with it, and I believe that the interests of the water lines are safe in the hands of your committee when attention is called, for they will have it in mind that the conditions are essentially different, and that the main purpose of the legislation is to control rail abuses and to preserve to the people the advantages of the water transportation; also to re- pose somewhere sufiicient authority to prevent that water transporta- tion from being under the absolute dictation of the railroads. The question is a public one, fraught with much good and potential for evU. It may be taken as a basic principle that water carriers are a natural defense and corrective against matters caUiag for regulation of land carriers from the very nature of their situation and relation and are in no sense open to the same abuses. If this amendment is not proposed by others, will you offer it ? Very truly, yours, Harvey D. Gotjlder. House of Representatives, Washington, March 4, 1910. Hon. James R. Mann, Chairman Committee on Interstate and Foreign Commerce, House of Representatives. Dear Mr. Mann: I beg to inclose herewith a letter from my friend and constituent, Thomas A. H. Hay, of Easton, Pa., who has had large experience in the building and operation of electric railways. I would DC very glad if you would give his suggestions some consid- eration in the preparation of the pending bill. With kind regards, I am. Yours truly, ^- Mitchell Palmer. Northampton Traction Company, Easton, Pa., Fehruary 22, 1910. Hon. A. Mitchell Palmer, M. C, Stroudslurg, Pa My Dear Mr. Palmer: I am very much obliged to you for your letter of the 10th instant, in reference to the bill prepared by the Attorney-General, known as the railroad-rate bill. We street-railway 23738— PT 24—10- 1350 BlliS AFFECTING INTERSTATE COMMEKCE. men ha,ve been at a disadvantage so long that the Government now should not give the steam roads a club to injure us. May I suggest an additional clause to go into the bill, that street railways having terminals in towns and cities and doing a,n interstate business should be compelled to permit the use of their terminals to noncompeting lines just the same as steam roads are compelled to permit the cars of their competitors the right to use their tracks. The Easton Transit Company, which owns all the entrances into Easton and Philipsburg, will not permit the use of their tracks by the Northampton Traction Company, the Easton and Washington Traction Company, and the Philadelphia and Easton Railway Com- Eany, all of which are interurban and noncompeting lines, in order to ring the passengers into the center of Easton. The Easton Transit Company has the right to use these terminals by reason of taxation locally and the aegis of the interstate-commerce laws, and yet that same law can not compel them to permit other trolley companies, noncompetitive, to use their terminals except at whatever price they set, which price is very prohibitive and pro- scrip tive. You are so familiar with oiu" situation here that I want to draw this to your attention, and you, like the keen lawyer you are, can readily see the force and strength of my suggestion. Very sincerely, yours, Thomas A. H. Hay. Interstate commerce act, proposed lamendment to relieve coastmse water carriers from operation of act. To the honorable the Senate andWLouse'of Representatives of the United States in Congress assembled: At a meeting of the commerce and transportation committee of the Philadelphia Maritime Exchange, acting under authority of the board of directors, held the 2d day of March, 1910, the following preamble and resolution was adopted: Whereas certain amendments have been suggested to Senate bill 5106 and House bill 17536 which affect the interests of coastwise water carriers, and as it is meet and proper that the Philadelphia Maritime Exchange, having considered these amendments, should Elace on record its conclusions with respect thereto: Be, and it is ereby. Resolved, That the Philadelphia Maritime Exchange, having con- sidered the proposed amendments to section 9 of Senate bill 5106 and House bill 17536, is of the opinion that the bills should be so drawn as clearly to exempt traffic shipped from port to port by coastwise water carriers. The Philadelphia Maritime Exchange, By J. S. W. HoLTON, President. Attest : C. R. Harwood, Secretary. Philadelphia, March 2, 1910. o HEARINGS BEFORE THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE OE THE HOUSE OF REPRESENTATIVES ON BIIiLB ABTECTINQ INTERSTATE COMMERCE Part XXV WASHINGTON GOVERNMENT PRINTING OFFIOB 1910 COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, HOUSE OF REPRESENTATIVES. JAMES R. MANN IRVING P. WANGBR, Penhsyivania. TKEDERICK C. STEVENS, Minnesota. JOHN J. ESCH, Wisconsin. CHARLES E. TOWNSEND, MlCfflGAN. JAMES KENNEDY, Omo. JOSEPH R. KNOWLAND, Califobnia. WILLIAM P. HUBBARD, West Virginia. JAMES M. MILLER, Kansas. WILLIAM H. STAFFORD, Wisco*fSiN. II , Illinois, Chairman. WILLIAM M. CALDER, New Yoek. CHARLES G. WASHBURN, Massachusetts. WILLIAM C. ADAMSON, Geoegla. WILLIAM RICHARDSON, Alabama. CHARLES L. BARTLETT, Georgia. GORDON RUSSELL, Texas. THEfUS W. SIMS, Tennessee. ANDREW J. PETERS, MASSACHUSETTS. BILLS AFFECTING INTERSTATE COMMERCE. "^i^u^^^f™^'^^- ^y^itliout objection, certain papers that have been used by the, committee will be printed as a hearing. Interstate Commerce Commission, TT T T, T.. Mareh 12, 1910. Hon. James E. Mann, Chairman Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. Sir: The Interstate Commerce Commission desires to urge upon you the importance of an amendment to the act to regulate com- merce which will provide a suitable penalty for neglect or refusal on part of a carrier, receiver, or trustee to comply with regulation^ or orders of the commission promulgated or issued under the pro- visions of section 6 of the act. The importance of this matter is so apparent that extended dis- cussion of it seems unnecessary. The experience of the commission has been that in a general way the carriers have treated its tariff regulations and orders connected therewith, issued under the power vested in the commission by section 6 of the act, in a reasonable and satisfactory manner, and that the responses thereto have been reasonably prompt. There have, however, at all times been some who were dilatory and unwiUing, and who apparently have been disposed to presume upon the fact that the act provides no penalty for neglect or failure to comply with such orders or regulations. Out of these experiences there has grown a conviction on our part that such penalty is essential to the effective enforcement of this important feature of the law, and this conviction is strengthened and crystallized by experiences of very recent date. Such an amendment will strengthen the position of the commission, will be a material help to such traffic officers of carriers as are disposed to conform to the law and respond promptly to its requirements, and wiU insure continued progress in this work. The continued absence of such a penalty will, we rear, tend to retard the work. We therefore recommend that section 6 of the act be amended by inserting therein or adding thereto the following : In case of failure or refusal on the part of any esurier, receiver, or trustee to comply with th« terms of any regulation adopted and promulgated or any order made by the €c(mmission under the provisions of this section, such carrier, receiver, or trustee shall forfeit to the United States the sum of five hundred dollars for each such offense, and twenty-five dollars for each and every day of the continuance of such offense, such for- feitures to he recoverable in the same manner as other forfeitures provided for in this act. The commission is not tenacious as to the amount of the main for-r feiture or of the continuing forfeiture, although each should be of a sufficient amount to effect the desired end. 1351 1352 BILLS AFFECTING INTEKSTATE COMMEECB. This request has also been addressed to the Committee on Inter- state Commerce of the United States Senate. Bespeaking your considerate attention to this matter, I am, for the commission. Yours, very truly, Martin A. Knapp, (Jhairman. Washington, D. C, March 12, 1910. Hon. James R. Mann, Chairman Committee on Interstate and Foreign Commerce, House of Representatives. Sik: We feel that the interests which we represent will be limited in their rights if the proposed amendments to the act to regulate commerce shall not affirmatively grant the right of the parties at interest in proceedings before the Interstate Commerce Commission to be represented by their own counsel should they wish to do so in defense of suits which may be brought to set aside, annul, or suspend such orders made in their interest. Speaking from a practical knowledge of the subject, we wish to im- press it on the members of the committee having the biUs in charge that in important cases the questions involved may generally be questions of fact as to how much the shippers must pay, and that involves questions pertaining to railroad finances, earnings, operating expenses, costs of service, rates, comparative rates, and every matter which the court should consider in determining the suit which rail- roads may bring wherein the validity of the commission's order is involved, the evidence making up large records of detail requiring much time and labor to properly analyze. Exactly to the same extent in money that railroads are interested in such cases the shippers are interested. To not grant the affirmative right that the complainants before the commission are entitled to be represented by their own counsel familiar with the subject-matter would be a denial of even-handed justice. We conceive that if the bills now before the House and Senate should be enacted into law the theory that the Attorney-General shall control such litigation would be a part of the enactment. Assuming that such legidation is to be enacted, we insist that shippers be granted the affirmative right, as expressed in the following proposed amendment to the biU to be inserted at the appropriate place therein, viz: Provided, That parties at interest to proceedings before the commission in which an order or requirement is made may appear and be represented by their counsel upon such terms as the court may prescribe in any suit wherein is involved the validity of such order or requirement of any part thereof and the interest of such party; but such appearance and representation shall not interfere with the control of the case by the Attorney-General, and the court wherein is pending such suit may make all such rules and orders as to such appearances and representation, the number of counsel, and all matters of procedure and otherwise as to subserve the ends of justice and speed the determination of such suits. Doubtless many cases will arise in which shippers would not care to be represented but would prefer to leave the matter in the hands of the Department of Justice, but in important cases lilce that now being argued before the Interstate Commerce Commission, involving the question as to whether advances made in the rates to and from Texas common points is reasonable, and which materially affects BILLS AFFECTING INTEBSTATE OOMMEECE. 1353 manufacturers and merchants at St. Louis, Chicago, Cincinnati, Cleveland, and intermediate points, as well as at points gn the Missouri River, the organization of shippers would feel that they are denied substantial justice unless the law provides that they have a right to be represented in any court where would be called in ques- tion such order as the commission may makfe respecting such rates. Innumerable cases will come before the commission where special qualifications by previous examination of the facts will be essential to a proper defense of such cases. It is no criticism on the Attorney- General or his assistants to say that it will be impossible in a great many of such cases for the Assistant Attorney-General to become acquainted with the facts within the time allowable. It is true that under the proposed bill he may employ as special counsel those who may understand the detail of the facts and be able to present the same for the shippers equally as well as attorneys for the railroads, but the Attorney-General is not obliged to do so, and while that would apparently be the duty of the Attorney-General, there is no doubt that shippers generally would prefer to be represented by their own counsel in the courts where the question involved is whether the order of the commission is valid, should such counsel not be employed by the Attorney-General. We submit, therefore, in behalf of the interests we represent, the foregoing amendment as a request in the interests of public justice. Very respectfully, J. C. Lincoln, President of Industrial Traffic League. H. C. Barlow, Traffic Manager Chicago Association of Commerce. S. H. Cowan, Attorney for American National Live Stock Association and Cattle Raisers' Association of Texas. New York, March 4, 1910. Hon. James E. Mann, Ghairmxm Committee on Interstate and Foreign Commerce, Washington, B. C. Dear Sir: We have looked over the hearings you sent us on H. E. 17536 and H. E. 21232 and regret that we did not know of these hearings in time to appear before the committee, as we are thoroughly in accord with that section of the bill which gives to the Interstate Commerce Commission the power to make through ]oint rates when one of the connecting lines is a water hne. , , ^^ ^ „ We should like to refute some of the statements made by Mr. Uutt, Mr Eaymond, and others objecting to this clause. For example, they all claim it is necessary for their steamers to secure port-to-port business, in order to get sufficient cargo to proceed in safety. All modern first-class steamers have double bottoms, in which they carry water ballast, and thousands of steamers are proceeding from port to port, all over the world without carrying a pound of freight. Uur own steamers repeatedly go south when freights are not available with nothing in but their water ballast. Further, Mr. Duff avoids 1354 BILLS AFFECTING INTERSTATE COMMERCE. any hint of the real nature of the association which he represents. All the companies in the American Steamship Association run regular lines and either prorate with railroads themselves or are a part of a larger company that has strong railroad affiliations. The association has no hesitancy in stating their membership is limited to regular lines and their attitude on every bill that has come before Congress has been to endeavor to kill anything that puts the independent steamer or vessel owner on the same basis as themselves. As the law stands to-day, the members of the American Steamship Association can make sufficient profit on their interior business to lower rates on their port-to-port business so as to kill any competition. Gradu- ally they are adding more and more commodities to their prorating arrangements, and if the railroads extend this prorating scheme far enough, it would practically cover all the coastwise business, as there is little or no freight that on one end or the other end is not handled by a railroad. To the statements that the so-called tramp vessels are old and inefficient, we take a decided exception. The Newport News Ship Building Company completed for us last August as fine a freight boat as there is of her size on this coast, 4,800 tons dead weight. They are now building a duplicate of this steamer for us, and we are also build- ing one at the Maryland Steel Company. The confidence we had that Congress would see that independent carriers were accorded a fair chance to compete on all business largely induced us to go into these new boats. We do not believe that fair, open competition would drive any line out of business, unless their capitalization and running expenses were so high that they could not compete with a better managed and better organized company. All we are interested in is a fair field with no favors to any of us, and from every statement that the organized lines have made before your cominitlee, they clearly show that this is not to their liking. Yours, respectfully, A. H. Bull Co. Chicago, March 7, 1910. Dear Sir: Won't you please have the administration bill amended in accordance with the inclosed suggestion which has been indorsed by our association. Fining the railroad $250 does not help the Snipper who has paid more money into the coffers of the railroad than than the published rate calls for. Your kindness in this matter will be very much appreciated. Very truly, yours, John M. Glenn. Hon. James R. Mann, House of Representatives, Washington, D. C. The published tariffs shall be as binding upon the railroads and upon all those who do not hold a bona fide quotation in writing, signed by an authorized agent of the railroad, as a law enacted by Congress. All bona fide quotations on freight rates made in writing by an authorized ^ent shall be binding upon the railroad he represents. EllliS AFFECTING INTEESTATB COMMEBOB. 1355 In the -event of an error in qoioting, the legal rate shall beibilled and collected. A claim vwill then lie for the difference between the amount paid and the amount quoted,, but Buch claim shall be made only through the Interstate Commerce Commission. If it shall appear that the quotation was made and accepted in good faith, the dlaini shall be allowed and a rebate be authorized to -be paid to the claimant. A record of all such claims shall be maintained by the Interstate Commerce Com- mission, in order that intentional errors in quotations may he easily discovered- 'The railroad making the error shall be wied the difference between the legal rate and the rate quoted. M it shall appear that the quotation was made or accepted with intent to evade *he provisions of the law, it shall be referred to a court of justice for its decision. Peoria, III., March 9, 1910, Hon. James R. Mann, House of Representatives, Washington, D. ■C.; This company respectfully urges favorable action regarding amend- ment ELkins-Townsend bill suggested by Illinois Manufacifcuriers' Association concerning freight-rate quotations. E. G. SCHAEFPEB, Traffic Manager Keystone Steel and 'Wire Go. Chicago, Mem)h '10, Hon. James R. Mann, Chairman Committee on Interstate amd Foreig.n Commenoe., Washington, B. C: We desire to urge your favorable consideration of Illinois Manu- facturers' Association amendment to Elkins-Townsend bill rdative misquoting rates. We consider original bill afiords no ad>eqii4iite protection and something like amendment imperatively required. We have suffered considerable loss through errors of railroad agents against which we could not guard. Believe it only righrt, that proper protection should be accorded hereafter. RosE-NBAUM Bros., Grain Merchmvk. PlEOEIA, ilLL., MoMh S, 1910, James R. Mann, ■jOhaimum House Comndttee mi Interstate Commerce, Wa^iiigton, D. C: We ask your support of amendment to the Elkins-Townsend bill indorsed by 4he Illinois Manufacturers' Association. • Peobia" Shippers' Association, O. S. Becker, Secretary. JoLiET, III., March 9^ Hon. James R. Mann, Washington, I). C: We urge the amendment *o Elkins-Townsend bill that will allow US to colkct of railroad if they quotcusthewEongr^te in. error. We have been sufferers without redress. t ^ Carrier Low fCo* 1356 BILLS AFFECl^lNG INTBBSTATE COMMEECE. 1 The Lake Shore Electric Railway Company, Sandusky, Ohio, March 30, 1910. Mr. Jas. R. Mann, Chairman Interstate and Foreign Commerce Committee, House of Representatives, WasMngton, D. C. Dear Sir: The bill before Congress authorizing a court of com- merce and amending Interstate Commerce Commission law, prohibits the commission from ordering through routes and tickets, etc., as between steam railroads and interurban railroads. It would seem to me that this bill should be amended so that the commission would have the authority to order such through routes wh«n, in their judgment, it seemed proper. Steam railroads, in this State at least, have taken the position that they will not do business with any interurban roads. For what reason, I do not know. This, however, is a burden to a great many people. It is my belief that the pubhc are entitled to all the benefits of transportation which can be secured, and if this biU becomes a law in the form it is at the present time it simply means that because this company, for instance, is not in the freight business the commission would have no authority. We have a great many points on our road where there is a large interchange of traffic between this company and steam railroads which we cross. For instance at MonroeviUe we cross the Baltimore and Ohio railroad, they stopping their trains in front of our station instead of their own'. Any passenger, however, desiring to use both roads must buy two tickets and have their baggage checked twice on account of this agreement between steam railroads. . The Lake Shore Electric comprises about 215 miles and for the year ending June 30, 1908, carried approximately 6,000,000 passengers. The Wheeling and Lake Erie, which comprises about 500 miles (almost entirely witmn the State of Ohio), handled during the same period, approximately, 1,090,000 passengers. All of these 1,090,000 pas- sengers had the opportunity of buying through tickets, having their baggage checked through to point of destination, while on our sys- tem of less than one-half the mileage and handhng six times as many, passengers were not accorded this privilege. It is a remedy to cover this discrimination which I seek. I trust you will appreciate the situation and will lend your influence to have the bill amended so that the commission may, in its j udgment, order through rates and routes between steam and interurban railroads. Yours, truly, F. W. COEN, Vice-President and General Manager. [Pacific Mall Steamship Company, Portland and Asiatic Steamship Company, San Francisco an4 Portland Steamship Company, Flood Building, San Francisco, Cal.] Washington, D, C, March 10, 1910. Hon. Wm. H. Taft, President of the United States, ' Washington, D. C. Sir: In conformity with your request at the close of olir conver- sation on March 8, I respectfully submit the following: li That the manufacturing centers of the United States, via the Pacific coast gateways, were closer by twenty to thirty days to the BlliS AFPECTING INTEESTATE COMMEECE. 1357 consuming^centel-s of the Orient than by either the all-water route trom New York City or by the all-water route from the manufactur- ing centers of Europe through the Suez Canal to the Orient. 2. It is of the highest importance for the success of our industrial manufacturmg plants in the world's competition to excel in time of dehvery to consuming centers. 3. That up to the time the Interstate Commerce Commission ruled that American transcontinental railroads should pubMsh and file their proportional rates on import and export business an enormous ton- nage had been built up and moved from the manufacturing centers in what is called Mississippi, Trunk Line, and Atlantic coast territory to the Orient via the Pacific coast gateways. 4. That the tonnage was moved on competitive rates, of which the railroads and steamship companies each, received a certain propor- tion, and these rates were competitive against the New York-Suez all-water route or the German-United Kingdoih all-water route, and therefore, the railroads were compelled to accept a lesser earning as ^heir proportion than they received on domestic freight. 5. That the movement of this enormous tonnage via the Pacific coast gateways stopped immediately after the ruling of the Inter- state Commerce Commission requiring the transcontinental rail- roads to publish their proportional rates, for the reason that the railroads declined to publish those rates and withdrew their pro- portional export and import rates in effect with the trans-Pacific carriers. The domestic rates are not competitive on export and import business, and used in connection with any trans-Pacific service makes the rates through the Pacific coast gateways pro- hibitive, in consequence of which all the tonnage now moves through the Suez and from European ports, and solely in foreign bottoms. 6. That the previous freight rates and service were satisfactory was evidenced by the large movement of tonnage, and the earnings on this movement accrued largely to American transcontinental railroads and American steamship, lines on the Pacific, whereas at present these freight earnings accrue entirely to foreign bottoms; and not only this, but the industrial centers of Europe have been placed closer to the consuming centers of the Orient than when this tonnage moved through Pacific coast gateways. It is respectfully submitted to you that this is not fair or right or proper, and that the law can be reasonably amended so that American industry can par- ticipate in the earnings on the movement of this tonnage as well as the fact that the American plants should be maintained in closer proximity to the consuming centers of the Orient than those of any other nation in the world. It is therefore respectfully suggested that section 8 of the bill H. R. 21232, as found at pages 15 and 16 of the bill, be amended after the word post office, line 15, page 16, as follows: And said section 6 is hereby further amended by adding thereto, at the end thereof, the following: "In the publication of rates, fares, and charges, by common carriers subject to the proviBions of this act, applying to the transportation of passengers or property from any place in the United States to a foreign country, or from a foreign ■country to any place in the United States, such common carrier may publish the total rate, fare, or charge as a unit from origin to destination, and such publication shall be deemed a sufficient compliance with the requirements of this act in respect to publication, so far as the transportation above mentioned is concerned." 1358 BII»LS AFFECTING INTBKSTATE COMMEROE. Thanking you for the time and consideration, you gave me at the interview, I am, Very respectfully, your obedient servant, R. P. ScHWERiN, Vice Pres. and Gen. Mgr. [Pacific Mail Steamship Company, Portland and Asiatic Steamslup Company, San Francisco and Portland Steamship Company, San Frandsco.] \ 120 Broadway, New York, March 28, 1910. The President of the United States, Washington, B. C. Sir: I beg to acknowledge receipt of your letter of March 11 and to thank you for the transmittal of the subject, as brought to your at- tention, to Senator Elkins, Representative Mann, and the Interstate Commerce Commission. The inclosed clipping from the New York Sun of Saturday, March 26, brings the subject very closely home to me, and I have taken the liberty to again call your attention to this' most important and vital situation in regard to American industry on the Pacific. It must be borne in mind that the ocean carrier is -not a mere con- veyer of freight, but it is a most important and able ally of the manu- facturing industries of the country of its own flag. In proof of this, I can cite a case: In the early nineties this country did not ship a pound of nails to Japan. I persuaded Mr. Schuyler, who at that time was president of a large wire and nail factory at Cleveland, to study the nail market of Japan, which was then being supplied entirely by Crermany and amounted to thousands of tons a year. Mr. Schuyler did so and re- ported to me that it would be impossible to enter that territery, for the reason that he could not make it a dumping ground for the excess of production of nails in this couutry. The Japanese required that nails be put up in piciil kegs of 183 pounds instead of the standard 1'00-pound keg of America, and also the Germans had been shrewd enough to educate the Japanese to use a peculiar wire drawn nail which would require special rolls to make. I urged Mr. Schuyler to' go after this business and told him we would pioneer for him; after strenuous solicitation, he became interested, made a study of whaii it would cost him to go into that market, and finally to;ld me. that the rate he would require from Cleveland to Kobe would be so low he would be ashamed to ask for it. I told him we would make any rate from Clevelend to Japan he would require to establish the business, and he finally told me that he would put in the rolls, make the jhcuI kegs, and go into that market to please me, provided I could give him a rate of .f 6 per 2,000 pounds Cleveland to fcobe. At first we practi- cally carried the nails for nothing on the steamer, giving the bulk of the $6 rate to the railroads. The movement at first was small, but rapidly grew, under the sell- ing enterprise of Americans assisted by us, to amazing proportions, and inside of two years we had the entire nail trade of Japaja, amount- ing to thousands of tons per year. Later Mr. Schuyler, of his own volition, raised the rate he was paying from f6 to $10 per 2,000 pounds. BILLS AFFECTW.G.ISrTERSTATB COMMEBCE. 1359 To-day I do not believe there are any nails shipped -to Japan from this country; if so, the amount is so small as to be insignificant. Nor- way has obtained control of the business. Steamship lines having space will hunt for business and engage and interest manufacturers and exporters, where without the steamship interest the trade will languish. The situation with us is extremely serious, and while it is alleged that the Pacific Mail Steamship Company is controlled by the South- ern Pacific Company, it must be borne in mind there are over 1,'000 stockholders of the Pacific Mail Steamship Company and the laws will not permit the Southern Pacific Company to pay out of its treasury the losses sustained by the Pacific Mail Steamship Company, and therefore it must inevitably pass into the hands of a receiver and bankruptcy unless it can get business for its vessels. We previously carried freight from all parts of the United States, and the railroads received on the business they originated in this country for their proportion of the haul two-thirds and the steamship company one-third of whatever the rate might be. On homeward cargo the steamship company received three-eighths and the railroads five-eighths on whatever the rate might be, the initial carrier making the rate to get the business. I have tried my best, without success, to persuade the railroads of America to pubMsh their proportional rate on all export and import business. A glance at the map will show that the Southern Pacific Company forms but a small propor- tion of the mileage of the' United States over which the tonnage to and from the Orient moves, and therefore they are but a small feature in the number of roads that must publish their proportional rates, so that my work has been among all railroads, and I have failed. I have therefore again taken the liberty of calling this matter to your attention, earnestly hoping that~you may feel disposed to use the influence of your great office with the gentlemen that have the interstate commerce bill under consideration in Congress to bring some relief to the situation, and in doing so you are helping American enterprise both on land and sea, the latter of which is seriously handi- capped by competition with foreign subsidized lines and still further handicapped by the administration of the laws of its own countrymen. This latter handicap can be changed by the will of Congress. I am, sir, Very respectfully, your obedient servant, R. P. SCHWERIN, Vice-President and General Manager. Baltimoee, Md., March 16, 1910. Hon. James E. Mann, Chairman Committee on Interstate amd Foreign Commerce, Bouse of Representatives, Washington, D. C. Dear Sir: Mr. Edwin H. Duff forwards me to-day a copy of letter sent to your committee by Hon. Martin A. Knapp, chairman Interstate Commerce Commission, in which this clause occurs: The second propoBed amendment, in the following language, "This act shall not be held to affect the limitation of liability of water carriers or water transportation as now provided by law," is, as we understand it, intended to leave the liability of 1360 BILLS AITEOTING INTBESTATE OOMMEECB. water carriers as now existing; however, that may be affected by the Harter Act and Carmack amendment. We see no objection to thiSj and it seems that the language proposed is in all respects appropriate to the end intended. This is the first intimation I have had of the exact language which the committee has favorably considered, and with your permission I desire to state that the language is very limited in appUcation, and only reaches to a question of limitation of Uability. The amendment suggested by the water lines in this respect is as follows: and any transportation by water affected by this act shall be subject to the laws and regulations applicable to transportation' by water. This last amendment was suggested in order to clear up the am- biguity contained in the twentieth section of the act known as the Hepburn amendment, wherein the initial liabiUty was attempted to be placed on the initial line for the haul clear through to destmation. It IS apparent that if that provision applies to a water line, aU the marine statutes relating to risks at sea are wiped out. This not only includes the act limiting Uabihty, but includes the act exempting against habihty, and also the Itarter Act and others. There is a very great distinction between the act limiting liabiUty in the case of a total loss and the act exempting against fire at sea. In the case of limitation of Uability, the limitation is not complete unless there is a total loss. The salvage secured from an accident must be surrendered as a part payment of claims where hmitation of UabiUty is pursued, but in a case of fire at sea there is a complete exemption regardless of the amount of salvage secured; so Ukewise are the exemptions contained in the Harter Act touching questions of navi- gation. The Harter Act exempts a vessel in relation to errors of navigation covering cargo, even though there be negligence on the part of the crew, without privity or knowledge of the owner. There are, therefore, a variety of statutes which may be affected by the twentieth section of the Hepburn Act. This matter was, as indicated, one of some doubt, but the further proposition to include water lines on through routes brings such Unes m so definitely that there seems to be little doubt that the marine statutes are wiped out by the proposed acts before you more effectu- ally than was thought to exist under the law as at present. We understand it is the pubUc desire, the desire of the committee, and also the desire of all the pubUc officers connected with this ques- tion, to make the law definite that water carriage is not to be affected by the commerce acts in such way as to withdraw the benefits designed in the interest of water transportation by any impUcation in the commerce acts. Therefore the matter may be stated that under the law at present there is some doubt of the repeal of these statutes. Under the effort to include water carriers in through routes there is less doubt, and it would appear that all these statutes are repealed, unless there is some saving clause put in the present bills. Now, -to malce an amendment in effect touching only limitation of liability may be regarded as only relating to the act limiting UabiUty, which is definitely known under that name, and by impUcation it could be asserted that all other acts, except the act limiting liabiUty, were repealed. Indeed, it would appear from the letter of the chair- man of the commission, who is so experienced in these matters, that BILirS AFFECTING INTERSTATE COMMERCE. 1361 the committee's effort seems to be interpreted to leave the law as at present, and (in the language of the chairman) "however, that may be Effected by the Harter Act and Carmack amendment." I don't know that I interpret the meaning of this correctly, but it may be that it is supposed that the committee intends to leave the law as at present under the Carmack amendment, and to effect in the proposed amendment to save the water lines language which will prevent the bills before you from making any further change. It is the desire of the water lines to settle this matter of the possible repeal of the great marine statutes, both in the effect which the Car- mack amendment has and in the effect which the proposed bills before you have, and, to prevent any ambiguity, the language as proposed is: and any transportation by water affected by this act shall be subject to the laws and regulations applicable to transportation by water. This language is general and covers all such acts, but when we undertake to particularize we are apt to overlook in the language certain acts which ought to be covered, and if in particularizing we point out some acts which are not .intended to be affected it may be argued that all other acts were intended to be affected, which I do not understand it is the committee's intention to do. Therefore, I particularly urge in this part of the amendment that the language suggested by the water lines be used. There can seem to be no good reason why laws passed for the protection of water transportation should not be left in full force, without interference by any of the commerce acts. If those laws are not right, they can be changed, but they certainly ought not to be put in danger of repeal by any ambiguous language in the commerce act. I know it is the committee's desire to get all the light possible on this question before coming to a final decision, and I trust this part of the amendment proposed by the water hues may not be passed over without giving it the fullest consideration and, I hope, adoption by the committee. Yours, very truly, Danl. H. Hayne. The Chamber of Commerce of San Francisco, San Francisco, Oal., MarcJi 1, 1910. To the President, Washington, D. C. Mr President: In behalf of the board of trustees of the Chamber of Commerce of San Francisco, I have the honor to confirm the fol- lowing telegram forwarded to you under date of February 26: We resnectfully protest against the enactment of Senate bill 5106 and House bill 17536 intended to amend the Hepburn Act and subjecting all water earners mamtam- inga schedule service on regular fines to the control of the Interstate Commerce Com- mission. This bill if enacted would paralyze the coastwise shipping lines. And inclose a copy of a letter addressed to Hon. S. H. Piles, United States Senate, which fully explains the views of this chamber in relation to proposed legislation subjecting all water carriers main- taining a schedule service on regular lines to the control of the inter- state Commerce Commission. ^ -r,T t. a ^ Yours, very truly, C. W. Burks, Secreiary. 1362 BILLS AFFECTING INTBKSTATE COMMERCE. February 16, 1910. Hon. S. H. Piles, United States Senate Chamber, Washington, D. C. Dear Sir: We are advised that eastern shipping interests are fearful that the com- mittees having under consideration S. 5106, mtroduced by Mr. Elkins, and H. R. 17536, introduced by Mr. Townsend, which bills are intended to amend the Hepburn Act, so called, are disposed to report those bills for passage with provisions therein so worded as to bring water, carriers maintaining a schedule service on regular lines subject to the control of the Interstate Commerce Commission; this not only as to such interstate transportation as they may have by reason of their volunitary con- nection with rail carriers, but as to all of their interstate transportation, even though it be entirely by water. , If that be done, the provisions of the Hepburn Act which would most seriously cripple such water carriers would be, first, those which inhibit a change in transpor- tation rates except at the expiration of thirty days or such lesser time as the com^ mission on special application therefor may permit, and second, the provision of section 20 of that act which provides: "That any common carrier receiving property for transportation from a point 'in one State to a point in another State shall issue a receipt or bill of lading therefor and shall be liable to the lawful holder thereof for any loss, damage, or injury to such property caused by it or by any common carriei, railroad, or transportation company to which such property may be delivered or over whose line or lines such property may pass, and no contracts, receipt, rule, or regulation shall exempt such common carrier, railrdad, or transportation company from the liability hereby imposed." The provision first above referred to — unless the commission be given authority to and shall fix a schedule of rates for the transportation by water of all kinds of prop- erty between all domestic water points, whether by vessels of regular lines or those inaking a single voyage; in effect, charter rates for all vessels between domestic ports — would prevent carriers operating vessels on a regular schedule from meeting competi- tive conditions that might at any time arise through the operation of what are com- monly known as "tramp" vessels, while the second may be so construed as to deprive the shipowner of all right to a limitation of his liability as provided by sections 4281- 4283, Revised Statutes, and the act of February 13, 1893, the "Harter Act," so called, in connection with loss of or damage to property shipped for transportation, whether partly by rail and partly by water, or entirely by water. All must admit that the monopolistic conditions attending transportation by rail are entirely absent from water transportation. This because all navigable waters are open to the free use of any vessel that anyone may at any time choose to employ, and a tramp vessel may at any time be placed on any route in competition with vessels operated on a regular schedule; while a railway, as to the territory it covers, is entirely free from such competition. These inherent differences in the conditions attending the two kinds of transporta- tion serve to show that regulations that may be needed for one are not at all necessary for the other; and clearly show that competition of shipowners, each of whom has the same right as any other to operate his vessel on a given line, may be safely in- trusted to maintain reasonable- water transportation charges between all water points; while, on the contrary, like competition in rail transportation not being possible, there may be need that railway transportation charges be subject to the commission's control. Reverting to the provisions of section 20 of the Hepburn Act referred to, we can not think that it can have been or can be the intention of Congress to deprive the shipowner of the benefit of the statutory limitation of his liability as heretofore pro- vided — a right which was given to induce the investment of capital in ships, and thereby increase the American merchant marine. That the shipowner has had such right has never been a cause of complaint. We can therefore see no good reason why that right should now be limited or taken entirely away, in view of the present strenuous demand that additional inducements be offered for the investment of capital in ships, this to the end that this country may not only have at its command such vessels as may be needed for the transportation of its products, but also such as may in time of war be needed as aids to its navy. We are strongly impressed with the idea that when Congress enacted the quoted provisions of section 20 of the Hepburn Act its attention was so fixed upon the regu- lation of rail transportation that it failed to realize the repealing effect which these provisions migjht have on the statutes limiting the liability of shipowners, and that had its attention been directed to such repealing effect it would have so modified BlULS AFFECTING INTEBSTATE COMMEBCE. 1363 those provisions as toj have made it certain that it was not intended to thereby repeal or modify any statute limiting such liability. As the Hepburn Act is now a subject for amendment, we sincerely hope that you may see your way clear to advocate its amendment in such manner as to relieve water carriers from the dangers and hard- ships above referred to, and that you will use your great influence with the committees having the bills referred to in charge to procure the report of those bills in such shape that transportation by water shall not be brought under the provisions of the amended Hepburn Act. Yours, truly, , Manager. March 30, 1910. Hon. James R. Mann, Gliairman Committee on Interstate and Foreigm, Commerce, House of Representatives, WasMngton, D. C. Dear Me. Chairman: On the 21st ultimo, when I was before the 'Committee on Interstate and Foreign Commerce, you interrogated me as follows: Does not the present practice sometimes lead to considerable extravagance in tak- ing care of cases? For instance, I had my attention called last spring, when I was home, by accident, to three attorneys from the Interstate Commerce Commission, each appearing in Chicago before one of the courts there — all before the same court — and each one in a different case, on a motion where the entire three motions were disposed of in less than ten minutes' time, but it required three attorneys of the Inter- state Commerce Commission to make a special trip to Chicago on a limited train in order to appear in three cases on formal motions that I would nave sent an office — ^not an office boy, but a clerk in the office— to attend to, and to all three of them at once. (See Record of Hearings, p. 1262.) At that time I was not acquainted with the pertinent facts, but I have since obtained them, and they show that your information is incorrect. I respectfully request, therefore, that you cause such change in the record to be made as you may think justice to the commission and its attorneys requires. Having learned that a statement similar to that made by you was made by the United States attorney located at Chicago, the secretary of the commission, by letter, asked the United States attorney for full particulars, and in reply that gentleman said: I find on referring to the records that on April 12, 1909, Mr. Walter appeared in case No. 29393, C, M. & St. P. Ry. Co. v. I. C. C, and the clerk's docket shows that the motion presented was to set the case for hearing on April 19, which was granted. Mr Farrell appeared in case No. 29328, C, M. & St. P. Ry. Co. v. I. C. C, and the clerk's docket shows that this case was also a motion to set the case for hearing on April 19, which was granted. . -.- , ^ x. I do not at this time find any data which enables me to state positively as to the presence here of the third attorney at that time. I do, however, find that case No. 10148, in the district court, of the United States v. A., T & S. F. Ry. Co. was tried on Anrilia My recollection at that time is that Mr. Dougherty (Doherty) attorney for the commission, came here on Saturday, April 10, and remained until after the close of the trial If my recollection with reference to Mr. Dougherty (Doherty) is correct, the three attorneys, therefore, who were present here on April 12 were Messrs. Walter, Farrell, and Dougherty (Doherty). The fact is that Mr. Farrell is the only one of the commission's attorneys who was in Chicago on said Apnl 12, and he went there, not to make a motion in any case, but to make oral argument m case No 29328 above referred to, which had previously been assigned to him for attention, and in which he had before that date prepared a brief At that time Mr. Walter was at his home m 'Kentucky hav- ing been called there by the serious illness of his mother and Mr. Doherty was at the commission's office in Washington. If the rec- ord in the clerk's, office shows that Mr. Walter was m Chicago on April 1364 BILLS AFFECTING INTERSTATE ■COMMERCE. 12, 1909, the record was made in error, and the United States attor- ney has been informed to that effect. _ Of the three cases mentioned, two were rate cases, assigned, respec- tively, to Mr. Walter and Mr. Farrell for attention, and originally set for hearing before the United States circuit court in Chicago on said April 12. On that date, however, the three judges before whom cases of this character must be heard were not available. Therefore, Judge Kohlsaat, who was the only circuit court judge in Chicago at that time, adjourned the hearings to the following Monday, and the cases were, in fact, argued orally on April 20 and 21, 1909. In addition to argu- ing case No. 29393, Mr. Walter argued what is known as the Missouri River rate case, on motion to dissolve an injunction which had previ- oush^ been issued by the court. From Chicago Mr. Farrell went to St. Louis, where he was engaged for more than a week assisting in the introduction of testimony before a master in the cattle case, so called, and Mr. Walter went to St. Paul to engage in similar work in the lum- ber cases, which involve rates from Pacific coast points to points in the East and Middle West. At the conclusion of the arguments in Chicago the court dismissed the petition of the railroad company in case No. 29328 ; but I understand no decision has as yet been rendered in case No. 29393. The third case was a test case under the "hours-of-service" law as applied to telegraphers. This was assigned for hearing in the dis- trict court at Chicago on April 15, 1909, and for the purpose of par- ticipating in the trial Mr. Doherty, who had previously given con- siderable attention to the matters involved, went to Chicago, where he arrived on April 14. The trial began on April 16, but was not concluded until April 21, when a verdict for tne Government was ordered by the court. In this connection I think best to explain somewhat a matter which does not appear to be generally understood. In section 15 of the act to regulate commerce it is provided that — All orders of the commission, except orders for the payment oJ money, shall take- effect within such reasonable time, not less than thirty days, and shall continue in force for such period of time, not exceeding two years, as shall be prescribed in the order of the commission, unless the same shall be suspended or modified or set aside by the commission, or be suspended or set aside by a court of competent jurisdiction. And a provision in section 16 of the act reads as follows: That no injunction, interlocutory order, or decree suspending or restraining the enforcement of an order of the commission shall be granted except on hearing after not less than five days' notice to the commission. Generally speaking, it is true that only important orders made by the commission are resisted by the carriers, and while the attorneys of the carriers have thirty-five days at least — that is to say, the thirty days' notice provided for in section 15 and the five days' notice Erovided for in section 16, as above pointed out — in which to prepare riefs and other documents to be used by them in each instance at the hearing in court upon application for a preliminary injunction, the attorney who has to contend on behalf of the commission against the granting of such injunction may not have more than the five days' notice provided for in section 16 in which to prepare answer to the carrier's bill' of complaint and such other documents as it may be necessary for him to use at the hearing. Therefore, without previous knowledge concerning the subject-matter of the suit in court, the attorney who represents the commission can not reasonably be BILLS AFFECTING INTERSTATE COMMEECE. 1365 expected to make a thorough or effective defense to the carrier's contention Heretofore this difficulty has been obviated, to some extent at least, by givmg notice to the commission's attorneys, both of the orders which are likely to be resisted by the carriers and of the orders a particular attorney will be expected to defend, if compliance with their terms is resisted by the carriers. But while it has been possible to supplement in this way the notice the commissions attorney would otherwise have, it has not been possible to assign to a particular attorney all cases brought in a certain circmt, or even all cases to be heard at a particular place. It is per- haps universally true that orders attacked are issued against carriers, one at least of which operates lines of railway in more than one cir- cuit, and for this reason the circuit a suit will be instituted in can not be known definitely in advance. It IS not necessary for me to impress upon you the importance of convmcmg the court that a preliminary injunction should not be granted. If a preliminary in] unction is granted it is usually made permanent upon final hearing, while if a preliminary injunction is refused, a permanent injunction is refused also, and the action taken by the circuit court practically determines whether or not an order of the commission shall be allowed to have any effect, because the time limit of two years, above referred to, will have expired before decision can be obtained from the appellate court. An illustration of the disadvantages under which the commission's attorneys labor may not be out of place in this connection. The case of N. Y. C. & H. R. U. R,. Co., et al., v. Interstate Commerce Commission, No. Eq. 3-107, then pending in the circuit court for the southern district of New York, was assigned to one of the commis- sion's attorneys for attention, and when he appeared before the court to resist an application of the carriers for a prehminary injunction, counsel for the carriers presented to the court and to him a brief of 55 printed pages. This presentation was at the moment the counsel referred to arose in court to make oral argument, and therefore the comnaission's attorney who had to make a reply to such argument had no time to examine the brief. In this particular case, however, the court evidently noticed the disadvantage under which the com- mission's attorney was placed, and in a few days after the case was submitted for decision, handed down a memorandum wherein it was provided that the commission might have three weeks in which to present a reply brief, and that the carriers might have an additional two weeks in which to answer such brief. In accordance with such permission a reply brief was prepared and filed by the commission's attorney, and later, in a decision of the court which sustained every material point made in the brief, the application for preliminary in- junction was denied. I inclose herewith for your information a pamphlet copy of the decision. I respectfully submit that in view of the circumstances above de- scribed, and for other reasons which will readily occur to you, it would not be practicable either to have the commission's orders de- fended by the United States attorneys and their assistants, or to so arrange that not more than one of the attorneys from Washington would be engaged in court at a certain place on or about the same date. Very respectfully, Judson C. Clements, Commissioner. 23738— PT 25—10 2 1366 BILLS AFPECTIKG INTEKSTATE COMMERCE. Chicago, Aprils, 1910. Hon. James R. Mann, M. C, Washington, D. C. Dear Friend Mann: Please send me copy of the railroad bill now before Congress. If this bill does not provide that the railroads shall furnish cars within a reasonable time and move them a reason- able number of miles per day or move them within a reasonable time after same are loaded, it will fall far short of its object. The people of the United States are depending on prompt and efficient transportation for the means of lire and existence. They want service for which they pay, and there is now no law on the statute books requiring railroad companies to perform service. We have had this matter up with the Interstate Commerce Commission a number of times during the past three years, and we have had it up with them daily during the past six weeks, and their claim is that our remedy in each case is by a civil case for damages, which is long and expensive and gives no relief. We are heavy shippers, shipping coal from 7 different States into 11 different States every month, and at the present time we have 25 cars scattered over 7 different States in different cities refused by individual car-lot customers on account of the long and unnecessary delay in delivery. Cars were accepted by the railroad company, bill of lading issued, and then sidetracked somewhere en route, and in spite of our repeated requests to get them moved forward and de- livered they failed to deliver them inside of a reasonable time, and the majority of the cars were detained over six weeks in transit, when a reasonable running time was six days. This running time is based on testimony of leading railway officials before the Interstate Com- merce Commission, and is printed in their report of same. The shipper is powerless to enforce his rights, as the law makes the rail- way company the agent of the consignee, not of the shipper, and if we have to sue the railroad company, they claim that our case is against the consignee, not against the railroad company, and that if the consignee had accepted the coal we would not have sustained any loss. A consignee can not enforce his rights against the railroad company, as out of ninety-nine cases out of a hundred his eoal yard is located on the right of way of the railroad company with a nominal lease for a year, subject to cancellation with a thirty days' notice, and the moment he commences suit against the railroad company to fcoUect damages on a refused car his lease is canceled and he is notified to remove his sheds from the right of way. The railroad company comes back on the shipper and asks him to give disposition for the refused car, charging him in the meantime |1 per day car service and $2 per car for reconsigning same, although the refusal is caused directly by the acts of the railroad company in failing to perform their 'duty as common carriers within a reasonable time. They side- track the coal and move it as they see fit. We have been sending copies of our correspondence with railroad officials to the Interstate Commerce Commission daily to show them the actual condition of affairs and the difficulties we have in getting our commodity delivered within a reasonable time. This correspond- ence will be available for any Congressman in th« future who desires it to present it as an argument for increased legislation empowering the commission or making it a fundamental law of the land that rail- BILLS AFFECTING INTEESTATE COMMERCE. 1367 roads shall give service for which they exact payment. If they tried to handle passengers and United States mail in the manner in which they try to handle freight every telegraph pole would be decorated with a railroad official until we did get better service. Parties who are freezing to death for want of coal when same has been purchased and shipped them, and which thev should have re- ceived within a reasonable time, can not wait until they file a com- plaint with the Interstate Commerce Commission and have the commission investigate same. They are relying on the commission to see that the railroad companies keep their equipment up to the necessary state of efficiency to give prompt service. The Chicago and Northwestern Railway has paid 7 per cent divi- dends for the past ten- years, and during that time they laid aside a surplus of $49,000,000, and yet during the past winter they have delayed more cars of ours than any other road out of Chicago. They either lack engines and men or else lack better officials behind the men to see that they do their duty. They now insist that we assume the loss on account of their electing to move the coal at their con- venience, instead of within a reasonable time and in the order in which they receive it from connecting lines. The law specifically provides that there shall be no discrimination as between persons, places, or property; yet they accepted our coal, moved it forward a few miles, sidetracked it, and delivered it months afterwards, as it suited their convenience. What chance have we to enforce our rights against a large corporation like the Chicago and Northwestern Railway, and especially when railroad attorneys are made Attorneys-General and an attorney for the same company is being considered for the supreme bench? We mention all this so that you can readily understand the necessity of some provision in the law empowering the commission to lay down reasonable rules and regu- lations for the movement of freight. The Postmaster-General can impose a penalty on the railroads for not moving the mail promptly, claiming it is for the benefit of everyone concerned that mail be deliv red promptly. Of what use is it to a customer to receive an invoice for a car of coal by mail promptly if he fails to receive the coal within a reasonable time and freezes to death pending the arrival of the coal? If coal was shipped in ton lots to individual con- sumers all over the United States instead of to dealers who expect to make a profit out of the resale of-^it the delays the past winter would have raised a bigger mob than in Coxey's. army to start for Washington. If at any time when you return to Chicago and desire to discuss this question with the writer, I will be pleased to entertain you at the club and cite you numerous cases of injustice along these lines. With kind regards, I remain, yours truly, S. P. HOSTLEK. Washington, D. C, April 1, 1910. Dear Mk. Mann : I am still confined to my house, and if I am able to do so, shall- go to Massachusetts to-morrow (Saturday) afternoon to be in Worcester with the President on Sunday, where he addresses a large meeting of railroad men. 1368 BILLS AFFECTING INTERSTATE COMMERCE. I have had time at home to give the pending railroad bill some attention, and some time ago got into correspondence with Mr. Byrne, sending him from time to time the amendments to the stock- issuing features of the bill. I regard him as a very painstaking and competent person. I sent him some days ago the last print of the bill, No. 23429, and he has suggested amendments, some of which he thinks are vital to the measure. I inclose a copy of these amend- ments, and I think it would be advisable to have them printed in order that they may be considered by the committee and adopted as committee amendments if desired. I wish you would scrutinize these very carefully, and I will take an early occasion to see you in regard to the matter. Mr. Byrne sent a young man down from his office, and I have been over these amendments with him this morning. Yours, sincerely, C. G. Washburn. Hon. James R. Mann, Hause of Representatives. FIRST AMENDMENT. Substitute the following for page 48, line 9, to page 49, line 24, inclusive, of H. R. 23429: "Sec. 17. That a new section be added to said act to regulate commerce, to be numbered as section 25, as follows: '"Sec. 25. That no railroad corporation which is a common carrier subject to the provisions of this act as amended shall hereafter issue for any purpose connected with or relating to any part of its business governed by the provisions of this act as amended any stock, bonds, or other evidences of indebtedness (excepting notes maturing not more than two years from the date of their issue) to an amount exceeding that which may from time to time be reasonably necessary for the purpose for which such issue of stock, bonds, or other evidences of indebtedness may be authorized, nor without previous or simultaneous payment to it of not less than the reasonable value of such- stock, bonds, or other evidences of indebtedness. "'The amount of said securities reasonably necessary for such purpose and the reasonable value thereof shall be ascertained by the Interstate Commerce Commission which, within ten days after the final hearing upon an application therefor, shall issue a certificate to the corporation stating the respective amounts of stock, bonds, or other evidences of indebtedness reasonably necessary to be issued for the respective pur- poses, and stating the reasonable value of such securties, respectively. Such cor- poration shall not apply the proceeds of such stock, bonds, or other evidences of indebtedness to any purpose not specified in such certificate without the previous determination by the commission that the amount so to be applied is reasonably necessary for such purpose, and no property, services, or other thing than money shall be taken in payment to the corporation of the price of such stock, certificates of stock, bonds, or other evidences of indebtedness, unless the Interstate Commerce Commission shall have ascertained and stated in a certificate issued by it to such corporation, or to any person or persons intending to form such corporation, and recorded with the commission before the issue of said stock, certificates of stock, bonds, or other evidences of indebtedness that the fair value of such property, services, or other thing than money is at least equal to the reasonable value of such stock, certificates of stock, bonds, or other evidences of indebtedness.'" The possible implication of a discretion to authorize and to refuse to authorize security issues given to the Commerce Commission in the second paragraph of the House bill is probably more apparent than real, but we fear that the use of the words "decision," "authorize," etc., which are certainly ambiguous, may make the provi- sion unconstitutional as a delegation of arbitrary power. See State v. Great Northern Railway (Minn., Ill N. W., 289). The same possible implication is carried by the provision on page 49 reading, "Such corporation shall not apply the proceeds of such stock, bonds * * * to any purpose not specified in such certificate," which might be deemed to confer upon the commission the authority not only to determine BILLS AFFECTING INTERSTATE COMMERCE. 1369 the amount of securities necessary for the purpose proposed and the value of the securities, but authority to veto the issuance of securities for any particular purpose or purposes We think it should be made perfectly clear, as is certainly your inten- tion, that the commission shall, as an administrative body, merely determine two specihc questions of fact, namely, the value of the securities proposed to be issued and the face amount necessary for the purpose authorized. The latter, of course will depend upon the former. When these questions have been determined, it should and will rest with the board of directors of the corporation to determine whether or not the issue is to be made. In the second place, the section as revised expressly prohibits the sale of the securi- ties at less than their reasonable value. While this is a more practical way of dealing with the subject, it is no more effective than the form adopted in the original bill which is now pending m the Senate, namely, to prohibit only the "issue," but to prescribe, as a condition precedent to the issue, the payment of the price determined to be the reasonable value. If this were the only section affected, of course, it would be immaterial which method of prohibition should be adopted, but since throughout the act prohibits and affects only the issue of securities, and, if a change in method IS to be adopted in this section, it must be accompanied by numerous changes in the subsequent provisions, bo h in section 17 and in section 18; probably the easier and safer method would be to revert to the original form. We also think that the admin- istrative features at the top of page 49 may be somewhat condensed, and we suggest that the provision permitting the commission to delay its decision thirty days after final hearing is unnecessarily burdensome. We think two-year notes can best be taken care of by excepting them altogether from the prohibitions in the act and by restoring the original safeguards when it comes to issuing securities to refund discount. Such safeguards will very effectually prevent the improvident issue of such notes, but will not prevent legitimate issues. On the other hand, a provision that such notes shall not be sold in a greater amount than "reasonably necessary" nor at a price below their "reasonable value" will practically prevent entirely the issue of such notes, for no directors will be willing to risk imprisonment on the question whether they have correctly determined these factors, and since there is no provision permitting the certificate of the Interstate Commerce Commission to be given for such notes the result will probably be entirely to prevent the issue. We fully approve of the elimination of the express requirement that stock shall not be sold at less than par, but, of course, no investor will be willing to take such stock at a value certified by the commission to be less than par, if, as is generally the case, the state law requires payment of par value, and thus be on record as violating the state law. We think that the only way your purpose can be made practicable is to provide that when stock is taken for property, the commission shall not certify the value of the property and the value of the stock in money, but shall merely certify that the value of the property is at least equal to the value of the stock. This will furnish the same protection to the investor, but will leave the question as to whether or not the stock is, in fact, issued below par to be determined as now by state law, and no increased liability will be placed on the subscriber. We think such a provision essential to carry out as a practical matter the purpose of your amendment. As so amended, we think the section will be a great improvement over section 13 of the original bill, and will not impose such an unfair burden on the construction of lines by the weaker roads in undeveloped territory. SECOND AMENDMENT. StrikcNOut all after "not exceed," in line 23, page 54, through "to be reorganized," in line 6, page 55, and substitute (as in Senate bill) the following: "in par value, the aggregate amount, par value, of the stocks of the corporation or corporations so reor- ganized or to be reorganized pursuant to said plan (being, in the case of each corpora- tion, the stock outstanding at the date of said certificate of the Interstate Commerce Commission or of the previous dissolution of such corporation) shall not be deemed to be prohibited by anything contained in this act." We see that you have limited the amount of stock to be issued on reorganization to the fair value of the property of the corporations reorganized, in no case exceeding the par value of the stock of such corporation. It is not clear whether "fair estimated value of the property " refers to the physical value of the property unencumbered or to the equity acquired by the new corporation after deducting the face amount of the bonds left undisturbed or the net value represented by stock of the new corporation after deducting the entire bonded indebtedness, new and old. Of course, this am- biguity should be cleared up, and we can not believe that you intend to limit the issue 1370 BILLS AFFECTING INTERSTATE COMMEBCB. of new stock to any amount lees than the entire physical value of the property, for if the limit is to be the net value — that is, the value of the interest of the corporation in the property — then the further limitation that the amount of new stock shall in no case exceed the amount of old stock would be in direct conflict with the theory of section 17. As a practical matter we believe that the amount of stock of the reorganized cor- porations will seldom if ever exceed the physical value of the entire property. We therefore think that in practically all cases under your amendment the amount of the new -stock will in fact be limited by the amount of the old stock, and the limitation to the value of the prop?rty will bo of no practical effect. We further think that occa- sionally the practical problem of reorganization in which the public's interest is vital may really require an issue of new securities for the old at the rate of dollar for dollar, regardless of the value of the property. Our conclusions are, therefore, that the limitation which you have inserted will either be found to be unnecessary, or, if not so construed, will accomplish a result which we can not believe you intend. We therefore suggest that the original phraseology be retained. THIRD AMENDMENT. On page 56, line 1, after "subject," substitute (as in Senate bill): "plus interest upon bonds issued as aforesaid for new money." It is provided at the foot of page 55 that the interest charges of the new company shall not exceed the charges of the companies which are reorganized. In case, however, a large amount of new money is paid in on reorganization and bonds issued therefor, it may be necessary and certainly would be proper that, to the extent of the interest on bonds so issued against new money, the interest charges of the new com- pany shall be allowed to exceed the charges of the old. Provision is made for this in the bill now before the Senate. FOURTH AMENDMENT. Page 56, line 6, at end of paragraph, insert (as in Senate bill): "or to prevent the issue, in addition to the stock hereinabove specified, of an amount of stock of the new corporation in lieu of, but not exceeding the face amount of, bonds and other obliga- tions which, under the provisions hereof, the new corporation might issue, and no issue of stock, bonds, or other evidences of indebtedness by any new corporation, which it may make consistently with the rules prescribed by section twenty-five of this act, shall be deemed' to be prohibited by anything in this section contained." In a sound and conservative reorganization it is frequently necessary to replace outstanding bonds with new stock, and we certainly think this should be permitted. The original act provided, in substance (H. R. 21232, p. 38, line 20, to p. 39, line 4), that on reorganization, the new company might issue an additional amount of stock in lieu of any bonds or other obligations which it might issue consistently with the provisions of this section or of the preceding section. We believe this clause to be very valuable and think it should go back in the act. In line 5 of page 56 of the new bill the word ' ' stocks " certainly contemplates the possibility of the issue of stock to .replace bonds, and we do not believe that the relative amounts of the various securities to be issued should be made any more rigid than in the original bill. FIFTH AMENDMENT. On page 56, lines 10 to 12, strike out: "and such consolidation or merger shall con- sist in uniting the organizations, properties, businesses, and stocks of said corpo- rations; and" And substitute therefor (as in Senate bill) the following: "without increase in the aggregate amount of the stocks of the corporations so consolidated or merged and with- out increase in the aggregate amount of, or the aggregate interest payable upon, the bonds or other obligations of said corporations so consolidated or merged ; or, " On page 56 and page 57, in the case of a merger, whether by actual corporate con- solidation or by^ the purchase of securities of one company by another, you have elimi- nated the provisions that there may be issued new securities up to the par value of the securities of the companies so merged, retaining, however, the alternative (which, we understand, was intended only to cover the case where the existing companies may be undercapitalized). The practical result of this elimination must, almost inevitably, be that no such mergers will take place, although everyone (most of all, the commissioni recognizes that the consolidation of continuous lines is highly desir- able. We understand the theory of the bill to be wholly prospective and not an attempt to reduce the capitalization of companies whose securities are now outstand- BILLS AFFECTING INTERSTATE COMMEKCE. 1371 ing. In the case of a, merger, while it is true technically that new securities are issued, yet as a practical matter, such new securities are merely new pieces of paper substituted for the old, and the aggregate amount of securities outstanding in the hands of the public is not increased. If, as the Interstate Commerce Commission has stated, "it is m the interest of the public to facilitate the consolidation of connecting lines," and, as we believe, the effect of the proposed House bill will be absolutely to prevent such consolidation in practically all cases (except where the railroads are so rich that their stocks and bonds are selling above par), then certainly the provisions of the original bill in this respect should be restored, both in the paragraph with refer- ence to corporate consolidation and in the following paragraph with reference to the purchase of securities, which, we understand, was inserted to cover a case of merger by security purchase, where state laws might not authorize a complete corporate consolidation. To illustrate a case of consolidation: Suppose two connecting railroad companies propose to consolidate and each have outstanding $10,000,000 bonds and $10,000,000 stock. The bonds are selling at 80 and the stock at 70, and assume that the market value of the securities is a faur index of the actual value of the properties. This will mean that the value of each railroad is $15,000,000, and the value of the properties of the consolidated corporation, $30,000,000. ^Alien the companies consolidate, the bonds, which can not be called in, remain a charge on the property, in face amount $20,000,000. Now, if the aggregate of the securities issued or assumed by the con- solidated company is limited to $30,000,000 it is evident that the new company can issue only $10,000,000 stock to take the place of the $20,000,000 theretofore outstand- ing. Since the $20,000,000 of old stock is selling at 70, the theoretical value of the new stock (half the amount) should be 140. But as a practical matter, remembering the difficulties in selling stock above par, the new stock will probably have a market value of considerably less than 140. Under these conditions the old stockholders will properly refuse to turn in their stock, thus making consolidation impossible. On the other hand, if, as the Senate bill provides, stock and bonds may be issued or assumed, par for par, for the securities already outstanding, the old stockholders will merely change the form of their securities without any increase whatever in the aggre- gate outstanding in the hands of the public. Only under such circumstances can such a consolidation take place. SIXTH AMENDMENT. Page 57, line 14, after "issued," insert "either (a), " and in line 17, page 57 (as in Senate bill), at end of paragraph, insert "or (6) shall not exceed the aggregate par val- ues of the stock and bonds so acquired, but without increase in the aggregate interest "flvable upon the bonds or other obligations so acquired." The foregoing arguments with reference to the proposed fifth amendment apply We also think, however, that if the original provisions can not be restored as here suggested, then the whole paragraph on page 57 would better be eliminated, leaving the question of issuing securities to provide funds to purchase securities of other roads to be governed entirely by section 17. SEVENTH AMENDMENT. If the last two amendments are not acceptable, then the first paragraph concerning reorganizations should be made to cover the incidental consolidation of temporary corporations formed in the course of reorganization, and, m addition on page 56 striL out the parenthesis beginning line 16 and ending line 22_. It should be made clear that a necessary consolidation as a step to reorganization is not affected, but is governed wholly by the paragraph concerning reorganizations. To accomplish this, insertat end of reorganization paragraph the following: , , ^v "If any such plan of reorganization shall contemplate that as a step to the carrying out thereof seveml corporations shall be utilized and that there shall be consolidations o^some or all of them or the acquisition by any of them of the property or securities of the oXrs the application for the certificate of the Interstate Commerce Commission shaUsosetforth and the corporation which under the plan is to issue the securities dttXtfble thereunder, whether a corporation resulting from such consolidation or 1372 BILLS AFFECTING INTERSTATE COMMEBCE. any corporation resulting from the merger or consolidation of any such corporations so utilized or to be utilized or acquiring the properties or securities thereof." If the committee is unwilling to adopt the fifth and sixth amendments suggested above, then we think it essential that the parenthesis on page 56, from line 16 to 22, inclusive, should be stricken out. As it now stands, it is not clear whether a reor- ganization which, as a merely incidental step or piece of machinery, involves a con- solidation is governed wholly by the first paragraph of the section or whether the second paragraph also applies. We do not believe it can be your intention to facilitate a reorganization of a single road while effectually preventing the reorganization of two roads operated together, which it may be necessary to consolidate as a prerequisite to reorganizing or to complete a reorganization. We further believe that it should be made absolutely clear that the paragraph with reference to reorganizations covers the whole subject, whether or not a consolidation may be incidentally involved, and we think it essential that one or the other of the alternative amendments suggested above be inserted in this paragraph. We fear that unless this is done the provisions with reference to reorganizations will not in fact accomplish what they purport to do, and we believe that if the committee has accepted the theory of the administration that reorganizations should be facilitated there is no other way to accomplish this result in the vast majority of cases, where the railroad to be reorganized runs through several States, by reason of the conflicting laws of which temporary intrastate corporations must be formed and subsequently consolidated. HEARINGS BKFOBE THE COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE OF THE HOUSE OF REPRESENTATIVES ON BILLS AFFECTING INTERSTATE COMMERCE PART XXVI WASHINGTON GOVERNMENT PRINTING OFFICE 1910 COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE. HOUSE OF EEPRESENTATIVKS. JAMES E. MANN, IRVING P. WANGEE, PENNSYLVANIA. FREDERICK C. STEVENS, Minnesota. JOHN J. ESCH, Wisconsin. CHARLES E. TOWNSEND, MICHIGAN. JAMES KENNEDY, Ohio. JOSEPH B. KNOWLAND, CALIFORNIA. WILLIAM P. HUBBARD, West Vikginia. JAMBS M. MILLER, Kansas. WILLIAM H. STAFFORD, Wisconsin. n Illinois, Chairman. WILLIAM M. CALDEE, New York. CHARLES G. WASHBURN, MASSACHUSETTS. WILLIAM C. ADAMSON, GEORGIA. WILLIAM RICHARDSON, Alabama. CHARLES L. BABTLETT, GEORGIA. GOEDON EUSSELL, Texas. THETUS W. SIMS, TENNESSEE. ANDREW J. PETERS, MASSAcnnsETTS. BOILER INSPECTIOE". Committee on Interstate and Foreign Commerce, Friday, March 25, 1910. The committee this day met, Hon'. James R. Mami (chairman), presiding. The Chairman. You may proceed. Mr. Wills. Mr. Chairman, we were expecting General Uhler. The Chairman. What bill do you especially refer to? Has there been any new bill introduced? Mr. Wills. Yes, sir; it is H. R. 22066. We had expected that General Uhler would be here this morning, and I would like to ask that when he comes he be giren preference over me. The Chairman. You mean General Uhler, of the Department of Commerce and Labor ? Mr. Wills. Yes, sir. The Chairman. We can get him here at any time that the commit- tee is ready to hear him. We called the meeting this morning at considerable inconvenience to the committee for the purpose of giving a hearing especially to those gentlemen from out of the city who happen to be here. Mr. Wills. If there is any such person present, I shall be glad to give way, but it was my understanding, while I wrote you about this meeting The Chairman. Mr. Roe wrote to me the other day sayiag that there were some gentlemen here who had attended the hearings before the Senate committee and who were still in this city, awaiting to be heard by this committee, and he asked if we could set an early day. After ordering the interstate-commerce bill reported yester- day we fixed immediately to-day to hear those gentlemen. Of course, we are willing to give you the entire time, but we may not be able to meet again to-morrow, and if there should be anyone from out of the city who wishes to be heard, it would, perhaps, be better to give him an opportunity to be heard at once, because we can hear you and General Uhler at a later date, if necessary. Mr. Wills. I shall be glad to do that, but to the best ot my knowledge there is no one present. , , , x j; xu -x The Chairman. Mr. Roe, have you anybody from out ot the city who wishes to be heard ? ., , xi xi Mr. Roe. Mr. Jeffery and Mr. Newland and another gentleman or two who are not here. t x • x r^^^^ The Chairman. I see a gentleman here from my district, Chicago, but I do not know whether he desires to be heard or not. Do you wish to be heard, Mr. Seng ? 1373 1374 BOILER INSPECTION. Mr. Seng. No, sir. Mr. Wills. There is a gentleman here, Mr. Ruefly, who, while he lives in this city and is here to-day, may not be able to be here to-morrow, and I would suggest that the committee hear from Mr. Ruefly. The Chairman. You may proceed, Mr. Ruefly. STATEMENT OF MR. OEEW RUEFIY, WASHINGTON, D. C. The Chairman. What is your occupation? Mr. Ruefly. I am a practical boiler maker. The Chairman. Located where ? Mr. Ruefly. At the present time I am located in the navy-yard here in Washington. Mr. Townsend. Working for the Government ? Mr. Ruefly. Yes, sir; at the present time. Before the Senate Committee on Interstate Commerce I related some few instances that had come under my personal observation that I knew to be not right, and I made a statement, I believe, in regard to a boiler explosion that happened at Roanoke, Va. As I stated then, there was a damage suit in that case. The company claimed that it was due to low water. While any expert that the company might bring in, of course, might say that it was due to low water, no practical boiler maker would say so. You will find that in those cases they never bring in a man who is an expert boiler maker. It is always a college graduate from here, there, or some other place in the country. This particular boiler, I wish to say, was in an old-time 8-wheel locomotive. The explosion happened just before I got to Roanoke. A fellow came and took me around to the boiler to look at it and there were two and a half rows of stay bolts broken on one side. Mr. Wanger. Please repeat that statement. Mr. Ruefly. A boiler maker came to me and asked me if I had seen the locomotive which had been blown up, and I said that I never had. He said that he would take me up to see it, and I saw two rows of stay bolts broken right on the hip of the boiler and two and one-half rows on the other side. Consequently the pressure coming at this point where the stay bolts were broken it just simply gave away and puUed the crown sheet down. The crown sheet was practically level. The flanges showed no sign of leakage. It simply collapsed on the side sheets and pulled the crown sheet down. The crown sheet runs across the top like that [indicating]. It was of the old type. They are not made at this time to any great extent; some few are made. The idea is this: The hip of the boiler comes down like that [indica- ting], and that makes this bar stiffer than on a smooth surface, and consequently in the case of expansion it would break the boiler where it is the stiffest on this side [indicating], and, as I say, two and one-half rows of the stay bolts were still sticking in the fire-box sheet. Gentle- men, suppose this [indicating] is the outside sheet. This is the inside of the fire-box sheet. This sheet [indicating] is naturally heavier than this. The bolt always breaks next to the outside [exhibiting] and the fire-box side becomes hotter than the outside. There is more expansion and contraction. Consequently it works this bolt right off here [indicating]. These bolts were sticking to this sheet [indicating]. BOILBE INSPECTION. 1375 The solid bolts, you understand, were sticking to this heavier sheet [indicating] and were bolted through this sheet. Of course there was nothing said in opposition to my -statement about this particular thing. Mr. Wangee. When was that case ? Mr. RuEFLY. In the early part of 1904. Mr. Wanger. What was your occupation at that time ? Mr. EuEFLY. Boiler maker. Mr. Wanger. In the navy-yard ? Mr. RuEFLY. No ; at Roanoke, Va. The Chairman. Connected with a railroad company? Mr. RuEFLY. Yes, sir; at that time. The Chairman. What railroad company ? Mr. RuEFLY. The Norfolk and Western Railroad Company. The Chairman. Is that the road the explosion occurred on ? Mr. RuEFLY. Yes, sir. I also related before the Senate Committee on Interstate Commerce another case of a boiler inspector on the Norfolk and Western Railroad. He tested the stay bolts. You understand that they go into the fire box and hit each one of the bolts with a hammer, and from experience you can tell whether one of the bolts is broken entirely, but there is no man who can tell a fractured bolt. He might find one now and then, but it is a mere chance. I refer to this case with regard to engine No. 961. Mr. TowNSEND. Do I understand you to say that it would not be possible to find out about a fractured bolt ? Mr. RuEFLY. Not always; a man will find one once in a while. Mr. TowNSEND. Do you know of any method of inspection that is practicable that would find all the fractured bolts 1 Mr. RuEFLY. Yes, sir; I do. The only method of finding frac- tured bolts is by the telltale hole, and when a bolt is broken it leaks there. Instead of taking the bolt out, the railroad company — some- times it is done by the engineer on the road, because the steam escapes and obstructs his view; he takes a wire nail and plugs the hole, and when he comes in to the shop he reports it and then the boiler maker temporarily closes the hole until the engine is made available to do the work, until it can be taken off the run. Now, as I stated before the Interstate Commerce Committee of the Senate, that was engine No. 961, although the Norfolk and Western Railroad officials claimed it was not and they showed reports that said I was mistaken and the reports did not show the number of bolts that I spoke of. I said there were 265 broken bolts taken out, but the inspector found but 60. We took the jacket off the locomotive and took the fines out in this particular case and made an external inspection and also an internal inspection and I think there were about 265 bolts that came out of that particular locomotive. There were only 60 bolts that he had found with a testing hammer. Now, I do not know of any other means to remedy this unless there is a federal boiler-inspection law that will require the railroad compa- nies to inspect the locomotives so often, to go right down in the locomotives and see if there is anything wrong. There has been a great deal of discussion in regard to how long it takes to make an inspection and some of the railroad officials claim that it will take from three to ten days to make a general inspection of a locomotive. The way the railroad companies inspect, it only takes about fifteen 1376 BOILER INSPECTION. minutes. They go over the bolts and turn in a report to the general foreman or the master mechanic, who turns it in to the superintendent of motive power. After a week or ten days they might get orders to take the bolts out of that particular engine. If the engine is not in the roundhouse, you have to wait until it comes in. Consequently the engine may be in a dangerous condition and still on the road. When the engine is ordered into the shop, if there is a special run to be_i^ made and there is no, other engine available to make that run, they take the engine and send it back over the road and maybe it is a week o^ ten days or a month before that engine is repaired. Mr. TowNSEND. How extensive is that practice ? Mr. RuEFLY. It is followed on every railroad I have worked for. Mr. TowNSEND. How many have you worked for ? Mr. RuEFLY. That would be pretty hard to answer. I have a record in a civil service examination. I think I got 40 different references in regard to that examination. I passed that civil service examination. The Chairman. We do not care anything about that. Mr. RuEFLY. At an average percentage of, 96. Mr. Wanger. Do you not remember oy what companies you have been employed in the last fifteen years ? Mr. RuEFLY. Yes, sir. I was employed by the Rock Island at one time. I have been employed by the Atlantic Coast Line, the Central of Georgia, the Chesapeake and Ohio, the Atlanta, Birmingham and Atlantic, the Alabama Great Southern, the Denver and Rio Grande, and various roads. Mr. TowNSEND. As a boiler inspector or boiler maker in all those cases ? Mr. RuEFLY. I have been boiler inspjector only in a local way, you understand. I never was general boiler inspector for any company. The Chairman. In what capacity were you employed by the com- panies ? Mr. RuEFLY. As a practical boiler maker. . Mr. Wanger. Was that employment in the boiler shops of the companies ? Mr. RuEFLY. Yes, sir. Mr. Wanger. Or was it as inspector, witnessing the operation of engines ? Mr. RuEFLY. I was foreman for the Southern Road at Lawrence- ville, Va., down here. There was one case down there where we had an explosion, but it did not happen to hurt anybody. Mr. Wanger. When was that ? Mr. RuEFLY. In 1905, I believe it was. I remember the number of the engine very well, No. 805. This particular locomotive was an old type of what they called the mogul type, built in Richmond a great many years ago. There was nothing that you could see from an external view that was wrong with the locomotive, nor even by going into the fire box. It had one crown bolt leaking and it blew out. The engineer told me that the same bolt had given him some trouble for some time. He called me out of the roundhouse before he left Lawrenceville and asked me about it, and I told him it had been leaking for some time, it could not be repaired unless we took the bars off, and that it would require possibly three weeks to get to this particular bolt. The engine went out and the next morning at Frank- BOILER INSPECTION. 1377 lin, Va., in connection with another engine, it ran as a double header to Norfolk, and while this engine was standing at the water tank the bolt blew out right back of the flue sheet on the lower part of the boiler. There must have been a groove there caused by rust which settled in this lap [indicating], and when this reaction took place the strain came there [indicatingj and the boiler was not strong enough to withstand the pressure. 1 believe that is about the same conclu- sion that the ofiicials of the Southern Road came to. I was not called in. I formed my own opinion and I suppose they did the same thing. Mr. Wanger. Would an inspection have revealed that weakness ? Mr. RuEFLY. Yes, sir. Mr. Wanger. Why did you not discover it ? Mr. RuEFLY. There is no boss boiler maker in this country who can do as he would like to do. He gets his orders from the higher officials. I do not know anything about when was the last time the flues were taken out of this boiler and the dome cap taken off. I had been there eight or ten months and I know that nobody had been inside the boiler while I was there, and I do not think there had been any- body in the boiler for possibly three or four years before — I do not know. Mr. Bartlett. You worked on the Southern road ? Mr. RuEFLY. No, sir. Mr. Bartlett. At that time you were on the Southern road ? Mr. RuEFLY. Yes, sir. Mr. Bartlett. The Southern road and other similar larger roads have rules in reference to the inspection of boilers, regulating the inspection of boilers, periodical inspection ? Mr. RuEFLY. Yes, sir. Mr. Bartlett. Are not those rules generally carried out ? Mr. Ruefly. No, sir. Mr. Bartlett. Whose fault is it that they are not carried out ? Mr. Ruefly. I do not know, except the operating department. Mr. Bartlett. Either the operating department or the master mechanic ? Mr. Ruefly. Yes, sir. Mr. Bartlett. I am very anxious to do anything for the safety of the employees and the public. Is it not the duty of the man who runs the engine to look out and to ascertain whether there is anything the matter with the boiler, and if he knows that the engine has not been inspected periodically or in accordance with the rules of the company, ought he not to call attention to the fact that it has not been inspected ? . , . Mr Ruefly. The engineer on the road is runnmg the engme over thfe road and if any defect comes to his knowledge when he gets to the roundhouse there is a report book and he reports. Mr Bartlett. I have been around there and know all about that. Mr Ruefly. He might report that the boUer be washed out and at the time that is done the stay bolts are supposed to be inspected, but the engineer never sees the stay bolts report. The engineer does not know how many stay bolts are broken or even the condition ot Mr Bartlett. In a very celebrated case the Supreme Court of the United States decided that where an engineer called attention to the 1378 BOILEE INSPECTION, fact that a stay bolt or any part of the engine was not in good order and the officials of the road sent him out and he was killed by reason of the defect he was not responsible, reversing the lower court of the State of Texas. It looks to jne like those defects which are apparent or discoverable by the exercise of ordinary care and dili- gence by those who run the engines should be reported, and if reported they should either be attended to or if not attended to then the rail- road assumes all the risk of danger and injury to the employees. Mr. Wangee. What is done with the report of the inspector? Mr. RuEFLY. It is sent to the superintendent of motive power, and he looks the report over, and if the engine is available he sends the engine back to have the bolts renewed; but it may be a week before they get a chance at the engine; consequently the locomotive is in service all that time, for a week or ten days, in a dangerous condition. Mr. Wangee. The engine is not taken out of active use when the inspector may report that it is unfit for use; is that the case? Mr. Rtjefly. Yes, sir. You see, the inspector is not exactly held responsible; he is supposed to do his duty. He can only inspect the locomotives when they come in. The Chaieman. How long since you have been employed by a railroad company ? Mr. RuEFLY. The last one was the Atlanta, Birmingham and Atlantic Company. The Chaieman. How long ago ? Mr. RuEFLY. I left there on the 1st of August. The Chaieman. Last August ? Mr. RuEFLY. Yes, sir. The Chaieman. Is that all ? Mr. Rtjefly. I would like to make a reply to the statement made by Mr. R. E. Smith. Mr. Wangee. What is done with an engine when an inspection is made and it is found to be in a dangerous condition ? Mr. RuEFLY. Just as I told you before. I can not tell you any differently. If that engine is so that it can be taken off the road and there is another one to take its particular run, it is very often repaired, but otherwise it is neglected. Mr. Wangee. No matter how bad the condition? Mr. RuEPLY. No, sir. I have known engines to run with any- where from 20 to 200 bolts broken and they never knew that there were so many broken bolts until there was an external or internal inspection. Mr. TowNSEND. I would like to ask you whether the. inspectors employed by the railroads generally are competent to do the work? Mr. RuEFLY. They are, if allowed to and given the time. Mr. TowNSEND. So the inspectors are generally competent to do the work ? Mr. RuEFLY. Yes, sir. Mr. TowNSEND. As I understood you, if I understood you cor- rectly, what you want is a law compelling the railroads to have a more rigid inspection of the boilers? Mr. RuEFLY. That is the idea exactly. What we want is exter- nal and internal inspection. An external inspection requires them to take the jacket off. BOILER INSPECTION. 1379 Mr. Bartlett. How often in a year should there be an inspection in order to keep the engine in safe condition ? Mr. EuEFLY. Once a year for the external and internal inspection. The railroad companies should not discontinue their inspection. That should certainly be kept up. As I said, the reports should be turned in to the local government inspector, so that Tie can keep close tab and know the condition of every engine. Mr. Stevens. Could you give any estimate of the number of loco- motives on the lines with which you are acquainted that are in bad condition ? Mr. RuEFLY. They are numerous. I would not like to make an estimate. Most every engine in the service to-day has some broken stay bolts right now, unless they have just come out of the loco- motive shops. Mr. Kennedy. Does the kind of water they use make any differ- ence as to how often an engine should be inspected ? Mr. Rtjefly. The water has not anything particular to do with the breaking of the stay bolts, I do not think. Mr. Kennedy. Does not the kind of water used materially affect the boilers? Mr. RuEFLY. Yes, sir; there is good water and bad water. Mr. Kennedy. And that affects the question of how often a boiler should be inspected ? Mr. RuEFLY. Well, I do not think so. It has nothing to do with the broken stay bolts, braces, etc. Mr. Kennedy. Do you understand what it is that causes these stay bolts to break? Mr. Rtjefly. Yes, sir. Mr. Kennedy. It is the action of the water in cutting them; that is what breaks them ? Mr. Rtjefly. No, sir; that is not it at all. It is just simply the expansion and contraction, the working of the fire box. Mr. Kennedy. That is the force. If they burn, they break. If they get coated with sediment, so that water can not get to them, they break. Mr. RuEFLY. If mud gathers on this sheet [indicating] it wiU become mud-burned, and this sheet will peel right off. Mr. Kennedy. If you had distilled water in the boiler, then there would be less pressure on the stay bolts ? Mr. RuEFLY. With regard to the mud-burning we would; yes, sir; but not with regard to the breakage. Mr. Kennedy. Is it not an important factor in the matter or inspecting boilers, the water that is used ? Mr. Rtjefly. Of course, as I said before, there is bad water and good water. The Santa Fe has a good many softening plants along its line. They do not use the alkali water. Of course, that water was very hard on the flues, because it corroded them, but that would not necessarily break the bolts. , .„..,• i ■■> i Mr Kennedy. I understand that. Now, m a bill of this kmd when we fix exactly the things that a railroad company shall do by statute, saying how often they ought to inspect the boilers or anything ot that kind will not the railroad company say that "the law does not re- quire us to do that" if we do not specify every single thing, and wiU not any attempt to direct how often the boilers shall be inspected be 1380 BOILER INSPECTION. a bad thing in place of a good thing ? Do you not think that the rail- roads will use the law to say that no precaution ought to be exercised except the precaution which the law prescribes ? ^> Mr. RuEFLY. I have read the bill and I would judge that it is com- plete. Mr. Kennedy. If we attempt to say the things that the railroad companies ought to do, will tney not assume that anything that we have not specified that they should do they will excuse themselves from doing ? Mr. RuEELY. I think if this law is complied with they will not have any excuse from anything. I think that covers it as completely as a bill could. Mr. Richardson. Your contention is not so much a complaint about the internal examination as the outside examination; that is what you are contending for ? Mr. RuEPLY. No, sir; I am contending for internal and external inspection. Mr. Richardson. Both ? Mr. RuEFLY. Yes, sir; once a year. Mr. Richardson. Can you tell us how many explosions there were on the line of railroad which you just left; for a year before you left ? Mr. Bartlett. That is a new road which he left. Mr. Richardson. Mr. Bartlett says that that is a new road ? Mr. RuEFLY. Yes, sir. Mr. Richardson. How long had you been with it ? Mr. RuEFLY. From the 1st of April to the 1st of August. Mr. Richardson. Had any explosions taken place? Mr. RuEFLY. No, sir; they were all brand-new locomotives, all in good condition. Mr. Richardson. No explosion had taken place ? Mr. RuEFLY. No, sir. Mr. Richardson. What is generally the cause of the explosion of a boiler; what is it attributable to? Mr. RuEFLY. More to broken stay bolts than anything else. Mr. Richardson. Do you not think it is a fact, from absolute expe- rience, that the explosions of boilers are ascertained to be attributable to the negligence of employees ? Mr. RuEFLY. No, sir. Mr. Richardson. And low water ? Mr. RtJEFLY. Gentlemen, let me tell you one thing. I have myself seen two locomotives that were absolutely exploded by broken bolts. Mr. Richardson. That was in the course oi how many years ? Mr. RuEFLY. Two in recent years, since 1900. Mr. Richardson. Are those the only two you have ever seen? Mr. RuEFLY. I am talking of complete explosions. I have seen the engines burn. Mr. Richardson. Do you think that you can make any machinery that will absolutely provide against any kind of accident ? Mr. RuEFLY. Well, I believe that federal inspection would eliminate a great many accidents. Mr. Richardson. It would help, as a matter of course, but do you believe that anything can be made perfect by machinery ? Mr. RuEFLY. As I said before the Senate committee, of course there would be some explosions, but I believe it would eliminate at least 60 per cent. BOILER IlSrSPECTION. 1381 Mr. Baktlett. Eliminate to 60 per cent or eliminate 60 per cent ? Mr. RuEFLY. Sixty per cent. Mr. Bartlett. Eliminate 60 per cent of the explosions ? Mr. EuEELY. Yes, sir. Mr. Richardson. You think that the railroad companies should increase the number of employees for the inspection of boilers ? What you want is for the inspection to be more vigorous and more frequent ? Mr. RuEFLY. Of course, if the locomotives have been run down and not repaired under official inspection they would certainly have to have more employees and more boiler makers or else they would have to discontinue doing business. On the other hand, you take a railroad which is in good shape, good locomotives, and is having no trouble, I do not think it would affect them at all. Mr. Richardson. What is your observation as to the number of times the railroads have the boilers examined — monthly or yearly ? Mr. Rtjefly. Now? Mr. Richardson. Under the present practice without this bill. Mr. RuEFLY. Some roads, the Norfolk and Western, are inspecting their stay bolts every ten days. Mr. Richardson. That is sufficient? Mr. RuELFY. Yes, sir; but that is not the idea. There is no boiler inspector who can tell all the broken bolts ; that is, fractured and broken bolts. A fractured bolt will hold its load until it is broken, but it simply breaks quicker The Chairman. This witness has been all over this matter before, and while I do not wish to interrupt any member of the committee asking questions, this witness has occupied three-quarters of an hour; he is not connected with any railroad and was permitted only to take the stand for a few minutes. There are other gentlemen here who probably have real information on the subject whom, I think, the committee would prefer to hear. STATEMENT OF MR. H. E. WILLS, ASSISTANT GRAND CHIEF, BROTHERHOOD OF LOCOMOTIVE ENGINEERS, CLEVELAND, OHIO. Mr. Wills. I have a large portion of what I desire to say written, but I would like to make a few explanations as I go along. One of the principal reasons why I am here is this: The last con- vention of the International Brotherhood of Locomotive Engineers passed a resolution requiring the grand chief engineer "To make every possible effort to have a law enacted by Congress requiring federal inspection of locomotive boilers on all railroads in the United ~ States," and I am here under instructions to urge on behalf of 65,000 locomotive engineers, who are employed in the practical operation of locomotives in the United States, the enactment of a law that will prevent, so far as may be possible, the kiUing and injuring of people by so-called boiler explosions. I unhesitatingly state it can and should be done. In my remarks I take the hberty of quoting from some thmgs said some time ago before this committee. First, I desire to direct your attention to the part of the proposed bill which requires the use of water glasses. They are necessary and advisable. They are an additional safeguard. From 85 to 95 per cent 1382 BOILEB INSPECTION. of the railroads require them. All railroads which are humanely managed with care for the safety of their men require them. Efficient management, I might say capable management, takes advantage of the benefits to be derived from their use. These benefits are, first, the use of the water glass gives to the engineer at all times the knowl- edge of the water level in the boiler, when he water is level, and of the fluctuations when the water in the boiler is not level or at rest. This knowledge can not be accurately obtained in any other way. The gauge cock does not give it. Second, the engineer can get more efficient and economic operation and use of his engine when it is equipped with a water glass; third, it provides a greater confidence for the engineer to know from the water glass the exact situation of the water in the boiler; fourth, the only reliance upon a gauge cock is the sense of hearing. The engineer must be able, amid the din of the operation of the engine thundering along the road, to distinguish the difference in sound between escaping steam and escaping water, while with the water glass he may see at any moment by a glance the situ- ation of the water in his boiler. Fifth, it is safer and more reliable under all circumstances to require the equipment of all locomotives with a water glass. I will try to illustrate by stating what does occur and is not unusual in the operation of a locomotive. In case an engineer should be placed in a position where he was obliged from any cause (and there are many) to temporarily favor the steam to the detriment of the water supply in the boiler — and that is no unusual occurrence, for when a boiler has been in use for a long time it usually has an accumulation of scale and mud — in order to keep a steam pressure necessary to make a meeting point with a superior train, or one having the right of track by direction. Such a condition often happens, and might be brought about by being stopped unexpectedly by an order board at some station where the train is not supposed to stop, or between stations, from accident to track or train. With a water glass in operation (and an experienced engineer can tell with no question of doubt whether it is or not) he can take every advantage, as all engineers are expected to do, and by a glance of the eye he knows just what he is doing so far as the water in the boiler is concerned. He can figure much closer on steam and time and secure better results than would be possible if he had to depend on the gauge cocks and give his attention to trying the cocks and catching the sound when he is required to give his undivided attention to the speed of his train in approaching this meeting point. The Chairman. Right there your argument seems to be addressed not to the safety of the boilers, but to the superior advantage to the railroad company in its operations by reason of the glass. Mr. Wills. To a degree; yes, sir. My statement, to some extent, I am free to admit, is calculated to reach you gentlemen and influence you in regard to the same subject and statements that were made before the committee at a previous meeting. Perhaps it has an indirect bearing upon the whole case. I could submit much of this without reading it, although I should be very glad to have the gentle- men have an opportunity to question me concerning any statement I make. Mr. Kennedy. I would like to interrupt you right there. You speak about the difficulties of the engineer telling the level of the water by reason of the gauge cocks. BOILER INSPECTION. 1383 Mr. Wills. Yes, sir. Mr. Kennedy. It may be water inside the boiler and when released it becomes steam ? Mr. Wills. No. If there is water in the gauge cock water will escape. Mr. Kennedy. What is the difficulty in telling with the eye; it is just a question of fact, whether the height is high enough ? Wlien releasee! it instantly becomes steam and comes out as steam ? Mr. Wills. No; the gauge cock is usually situated to carry the steam or water into a dripper, so it will not fill the cab with steam. Mr. Kennedy. If a man had something else to look at, he might not be able to tell with his eye ? Mr. Wills. If the escaping steam got into the cab it would obscure his view, and it goes into the dripper to be carried immediately away, and a man must listen to get the sound in that dripper between the escaping steam and water. It would become not only a source of annoyance but it would be unsafe to have the windows obstructed with the steam. Mr. Kennedy. I did not so understand it. Mr. Wills. I will be glad to make that plain. Mr. Adamson. Does the average engineer operating these engines understand the mechanism and the operation of the boiler ? Mr. Wills. Not the mechanism of the boiler; he fully understands the operation of it. Mr. Adamson. Does he understand alt the parts and the office of those parts ? Mr. Wills. Not necessarily, not" their construction, but he must understand the operation. Mr. Bartlett. He must rely upon some party who furnished the engine for its construction ? Mr. Wills. If a boiler shows a leak, a locomotive engineer must understand and does understand whether that leak means danger or not, but to just what degree no man can tell. Mr. Adamson. Does he know enough usually to recognize an item of unsafety to the boiler ? Mr. Wills. He certainly does. Mr. Adamson. Does he ordinarily know as much as the average inspector as to the inspecting of engines ? Mr. Wills. He does not have the same opportunity. We do not claim that he does know, because his time has not been given to inspecting boilers. He does not have the same opportunity as an inspector. , , ., ■ Mr. Kichardson. Does he know when the boiler is getting in a dangerous condition? Mr. Wills. It depends on what it is. Mr. Richardson. It would depend on the circumstances ? Mr Wills. A locomotive engineer who had operated a boiler would know quicker and be a better judge of whether or not it was dangerous than some man who had had no experience. Mr Adamson. I would hke to ask whether it would be possible to utilize the services of the engineer himself— it might elevate his standing a little and increase his information and efficiency a httle— would it be possible to utilize his services as an inspector on each engine ? It would seem to me that would afford a solution. 1384 BOILER INSPECTION. Mr. Wills. I think I can speak advisedly for over 60 per cent of the locomotive engineers employed in the active operation of locomo- tives in the United States. We would prefer to have an experienced boiler maker and repairer as inspector of our boilers. I say "our boilers" because we operate them. The Chairman. I take it your position is that, so far as those things are concerned that are apparent in the operation of the engine, the locomotive engineer is as well qualified as anybody, but those things which appear upon examination that are not apparent from the operation of the engine require the services of an expert boiler maker ? Mr. Wills. Mr. Chairman, I believe that is substantially correct; but here is the engineer's position, in reply to you and these gentle- men: The average engineer to-day has not control over the boiler or the locomotive that he runs, as a rule, and when he is called to go out he takes whatever is given to him, and he goes on that engine and goes to the other end, and reports there any defect that he may notice. Mr. Adamson. It would be impracticable to make him an inspector ? Mr. Wills. In the majority or cases the average engineer, I believe, would not be as well qualified for an inspector of boilers as a practical boiler maker. Mr. Adamson. If he were, it would be impracticable under the con- ditions you have just spoken of — that he is liable to be taken off and put on another engine s Mr. Wills. Yes, sir. I do not think it would bring about good results, the desired results, to require an engineer who operates an engine to be responsible for all defects in connection with the boiler. Mr. Adamson. He certainly would give himself the benefit of the doubt? Mr. Wills. Yes, sir. Mr. Richardson. You want to get up a bureau and have the Gov- ernment appoint about 1,200 different officers? Mr. Wills. No, sir. I will cover the whole ground. The state- ment may be a little lengthy. Mr. Richardson. You do want the Government to appoint these men? Mr. Wills. Certainly. Mr. Richardson. About how many inspectors ? Mr. Wills. About two or three hundred. It might be upgrade, where the locomotive must be worked to its full capacity to within a short distance of where he must come to a stop ; or it might be down grade and around sharp curves, where it would not do for him to miss applying the brakes at the proper moment. It may be foggy and the rails slippery, and he must know by his watch, and not by guess, that he does not infringe one-half minute on the time that belongs to the other train. If the weather is cold, steam from the gauge cocks, if used, causes frost to gather on the windows, and in warm weather fog will gather on the front window, and no engineer can keep his head out of the side window of a locomotive cab and at the same time open and close a gauge cock and listen to the sound of escaping steam or water from the same; and he needs his hands to handle the throttle, sand appliances, air-brake valve, and perhaps the reverse lever. BOILER INSPECTION. 1385 I don't hesitate to say that it is absolutely more rehable and safer under any and all circumstances to trust to the water glass than the gauge cocks, but although either can be used without the other I consider both a necessity. I wish to state positively that water in a glass connected at top and bottom with a boiler, so as to show the posi- tion of the water in the boiler, with a steam pressure of say 40 or 50 pounds or more, the water in the glass will be constantly and per- ceptibly moving, any statement to the contrary notwithstanding, whereas if the top cock is closed, the water will move up and out of sight. If bottom cock is closed, line will not change unless the water in the boiler should go above the opening in the top cock. Water- glass cocks are all provided with a means of blowing out in case one should show indications of not working properly. Locomotives can be operated without water glasses, with the usual three gauge cocks about three inches apart, and if one, from any cause, gets stopped up, which they often do, with no water glass, an engineer is, to some extent, between "His royal highness and the deep blue sea." He must not let it go above the top cock, and he dare not let it go below the bottom one of the two in use, and when it is between the two, he must guess where. There are many reasons, when detailed, why we desire to have a federal inspection of boilers, but I believe I can say the principal one is that there has been 265 persons reported by the railroad companies as having been killed, and 3,656 as naving been injured, during the five years between July, 1904, and June, 1909, by locomotive boiler explosions, and I desire to show you gentlemen how those reports read; and I blush when I read them, not for the engineers, but for the men who make those reports and expect people to believe that men who are employed and supposed to be capable of filling the responsi- ble position of a locomotive engineer, knowing full well the result, will sit on a seat in a locomotive cab and take the lives of others and commit suicide himself. They are as follows [reads] : TYPICAL CASES FROM THE ACCIDENT KEPOETS RENDERED TO THE INTERSTATE COMMERCE COMMISSION, ILLUSTRATING THE NEED FOR BOILE'R INSPECTION. (1) Crown sheet blew out, causing injury to two persons. Cause given as low water. (2) Boiler explosion, killing one person and injuring one. Cause given as low (3) Boiler explosion, killing two persons and injuring three. Cause given as low (4) Crown sheet dropped, killing one person and injuring one. Cause reported as low water. Mr. Knowland. No inspection would have prevented that ? Mr. Wills. I take the position that proper inspection will prevent from 70 to 90 per cent and then the work properly done after that. The inspection alone will not do it. Mr. TowNSEND. You take the position that those reports are not faithful; that it was not due to low water? Mr. Wills. That is my opinion, and I speak not as a college gradu- ate from a law school; not as having been associated in this Capitol building with the high officials who make our laws; I speak not as a Senator or attorney; I speak not as a railway manager; I speak as a practical locomotive engineer with thirty-seven years' experience m the operation of a locomotive. 1386 BOILER INSPECTION. Mr. Adamson. If you have federal inspection of the boilers, would it not be equally advisable to let the inspection cover the operators ? Mr. Wills. I have no objection to anything that will bring about the desired result and prevent the loss of life. I would have no objection to having the railroad managers examined. I would have no objection to having the superintendents of motive power, the train dispatchers, and all other officials of the railroads examined in order that the public may know that they are qualified to fill the positions they occupy. I have no objection to the examination of the steam- boat engineers or the locomotive engineers, if it is thought advisable. Mr. Richardson. Within what period did those accidents occur? Mr. Wills. Five years, as shown by table "Boiler explosions dur- ing the period July, 1909, to June, 1909, inclusive." Mr. Knowland. Your contention is that the report is inaccurate ? Mr. Wills. Most assuredly. I say that we frankly blush for the men who make the report. Mr. Wanger. Have you any personal knowledge of the cases reported ? Mr. Wills. I make no criticism of the individual cases. I can make them up and bring them here, if it is desirable. I speak for those who I say are practically unanimous in their desire to have this protection thrown around them. I felt that it would do, and that it would not be necessary for me to bring here specific cases and to go into the details of condemning any one particular railroad or any one railroad official. There are many of the roads to-day that are giving proper inspection to their boilers. Some of the roads that give thorough inspection find it inconvenient at times to do the work that is necessary after reports have been made, and we will imdertake to show you so plainly that you can not help but understand before we are through with this hearing. Mr. Richardson. You challenge the truth of the reports made in that way ? Mr. Wills. Generally speaking, I do. Mr. Richardson. You base it simply on the stateinent made to this comnoittee that these gentlemen are asking for more protection. That is the reason that you have given. What other reasons are there ? Mr. Wills. I have many; I can bring them here. Let me tell you why Mr. Richardson. If you make that charge before this committee, you should be prepared to furnish the information. Mr. Wills. If you want to force me to make the charge, perhaps you can succeed. Mr. Richardson. I think anybody who makes a charge against the integrity of a report ought to be prepared to submit the facts that he has based the charge on. Mr. Wills. When I say that I blush for the people who make the report, is that a formal charge ? Mr. Richardson. No, sir. Mr. Wills. If you draw out of me by force and force me to make a formal charge, I can bring them here. I will tell you why I do not want to make a charge. I have had them in my possession for three months, ever since I came to Washington. I can bring them here,, but the men whose names are signed to them I shall expect to be dis- missed from the railroads for the very first excuse the railroads can BOILEE INSPECTIOlir. 1387 get for doing so. I do not want to have the men dismissed. I can show you letters saying, "Use this letter, but do not use my name." Mr. Richardson. My judgment right there is that your highest and most patriotic duty is to the country, and if there are any men doing business in that way in this country they should be exposed. Mr. Wills. I am not looking to get a whole lot of employees discharged. Mr. Kennedy. What is your individual experience as to water being permitted to get low ? Mr. Wills. I deal with all that in my statement, if the gentleman cares to foUow me. Mr. Sims. I make the request that the gentleman be permitted to finish his statement. The Chairman. Proceed, Mr. Wills. Mr. Wills. I assume that my statement is, to some extent, intended as a reply to the former hearing. No. 23, as I have numbered each one of the accidents: Flue bursted, causing explosion in fire box, which blew out ash pan, killing 1 person. The report states that investigation showed that explosion was due to low water on the crown sheet, resulting in the heads of 9 bolts pulling out, allowing sheet to drop 1 inch. Engineer held responsible. To a practical man, a boiler maker, a report of that kind is actually absurd and ridiculous. If you gentlemen care to take the time to study that, you would appreciate it. There are something like 46 or 48 accidents given as due to low water, and the total number is 79 of so-called boiler explosions. Mr. Bartlett. If the boiler was strong and stout and the bolts were already in place and held, instead of tearing the bolts out, it would tear out the metal ? Mr. Wills. Not always. A crown sheet may become burned by the lack of water, and when it gets to a white heat it softens the metal. It puUs down and simply tears out, and it is not what might be called an explosion. Mr. Bartlett. You did not understand my question. I mean to say that if the stay bolts and everything was in good shape and an explosion occurred by reason of low water^ the water getting low, by turning in the cold water, instead of pulling out the bolts, it would affect the metal ? Mr. Wills. I want to say there have been many tests and it has been shown that the cold water does not explode them. ' Mr. Richardson. That number of cases covers a period of five years ? Mr. Wills. Yes, sir. Mr. Richardson. What territory did those 79 cases cover, all the United States ? Mr. Wills. Yes, sir. Mr. Richardson. How many miles of railroad are there, some- thing like 230,000 ? Mr. Wills. Yes, sir. Mr. Richardson. That is an average of how many cases a year ? Mr. Wills. I do not know how many more explosions there were that have not been reported. These are the cases reported to the Interstate Commerce Commission simply. 23738 PT 26—10 2 1388 BOILER INSPECTION. Mr. KiCHARDSON. What is the average number of explosions, according to your statement ? Mr. Wills. I have not figured that out. Mr. Richardson. I thought you were a quick mathematician and could tell us ? Mr. Wills. No, I am not a mathematician; I am a practical loco- motive engineer. Mr. Wanger. Proceed with your statement. Mr. Wills (reads) : 5. Crown sheet dropped, killing 1 person and injuring 1. Cause given as low water. 6. Crown sheet dropped, killing 2 persons an^ injuring 1. Report states that inves- tigation made by 2 disinterested boiler inspectors indicated that accident was due to low water. 7. Crown sheet dropped, injuring 3 persons. Cause stated to be due to low water. 8. Crown bolts pulled through the sheet, allowing water and steam to escape into the fire box, badly scalding 2 persons. The accident said to be due to low water. 9. Boiler exploded, killing 1 person and injuring 1. Said to be caused by low water. 10. Boiler exploded, killing 2 persons and injuring 6. Said to be due to low water. 11. Crown sheet dropped down on one side of fire box. Crown bolts pulled off and six radial stays pulled through sheet. One persons killed. Said to be caused by low water. 12. Crown sheet dropped, resulting in boiler explosion. Two persons injured. Cause stated as low water. 13. Crown sheet dropped, killing 1 person and injuring 1. Cause stated as low water. 14. Crown sheet dropped, injuring 2 persons. Cause stated as low water. 15. Crown sheet dropped, killing 1 person. Cause stated to be due to low water. 16. Crown sheet dropped, injuring 1 person. Said to be due to low water. 17. Crown sheet dropped, causing boiler to explode, killing 1 person. Cause given as low water. 18. Crown sheet dropped, causing boiler to explode, killing 1 person. Cause given as low water. 19. Boiler exploded, killing 3 persons and injuring 2. Cause stated to be low water in the boiler, due to neglect of engineer. 20. Boiler exploded. Cause stated to be low water. Two persons injured. 21. Boiler exploded, injuring 1 person. Cause stated to be low water, due to neglect of engineman. 22. Crown sheet dropped, injuring 2 persons. Cause stated to be low water. 23. Flue bursted, causing explosion in fire box which blew out ash pan killing 1 person. Report states that investigation showed that explosion was due to low water on the crown sheet, resulting in the heads of 9 bolts pulling out allowing sheet to drop 1 inch. Engineer held responsible. 24. Crown sheet dropped, injuring 1 person. Cause stated to be low water, due to neglect of engineer. 25. Boiler exploded, injuring 3 persons. Cause stated to be carelessness on the part of the engineer in allowing water to become low in the boiler. 26. Crown sheet dropped, injuring 2 men. Accident supposed to be caused by low water. 27. Boiler exploded, killing 2 persons. Cause stated to be low water. 28. Crown sheet dropped, killing 1 person and injuring 1. Cause stated to be low water in boiler, due to carelessness of engineer. 29. Crown sheet dropped, injuring 4 persons. Cause stated to be low water in boiler. Engineer held responsible and dismissed from the service. 30. Crown sheet dropped, injuring 3 persons. Cause stated to be low water. Engi- neer held responsible. 31. Crown sheet dropped, injuring 3 persons. Said to be due to low water. Engi- neer held responsible. 32. Crown sheet dropped, injuring 1 person. Said to be due to low water. Engi- neer held responsible. 33. Boiler exploded, killing 2 persons. Said to be due to low water. 34. Boiler exploded, killing 4 persons and injuring 1. Said to be caused by low water. Engineer held responsible. 35. Boiler exploded, killing 1 person and injuring 4. The report states that an investigation showed conclusively that the accident was caused by neglect of the engineer in allowipg water to get too low in the boiler. BOrL.EK INSPECTION. 1389 36. Boiler exploded, killing 3 persons and injuring 1. Cause stated as shortage of water in boiler. 37. Crown sheet dropped, killing 1 person. Cause stated to be low water. 38. Boiler exploded, killing 2 persons. Cause stated to be low water. 40. Boiler exploded, killing 2 persons and injuring 1. Report stated that it was supposed explosion was due to low water. 41. Boiler exploded, killing 3 persons. Cause stated to be low water. 42. Boiler exploded, killing 1 person and injuring 1. Cause stated to be low water. 43. Crown sheet dropped, injuring 2 persons. Report states that accident is sup- posed to have been due to low water. 44. Crown sheet dropped, killing 1 person and injuring 1. Said to be caused by low water. Engineer held responsible. * 45. Rivet in corner of Are box pulled out, allowing hot water to drop into the fire box, causing steam to rush out through fire-box door, badly scalding fireman. Report states that engine was properly inspected before going out into train and was found to be in good condition. Accident said to be unavoidable. 46. Washout plug blew out of boiler, injuring 1 person. Report states that plug was in good condition, but apparently had not been properly put in. 47. Plug blew out of front end of flue sheet, killing fireman. Report states that deputy coroner rendered a verdict exonerating the railway company and its employees from all blame. 48. Arch pipe bursted, killing 1 person and injuring 1. 49. Arch pipe bursted, killing 1 person. 50. Arch pipe bursted, scalding fireman so badly that he died two days later. 51. Crown 5ieet dropped out of engine, causing explosion, killing 1 person. No cause was stated. 52. Boiler exploded, injuring 1 person, at front end of wagon top just front of sand- box, breaking engine in two. Report state's that cause of this explosion is not known. The boiler of engine was apparently in good condition. The master mechanic stated that it might have been the result of crystalization of sheet, causing break between rivets. The boiler was thought to be in sound condition. 53. Boiler exploded, injuring 1 person. Report states that no defect in boiler was found. 54. Crown sheet dropped, injuring 1 person. No cause stated. 55. Side sheet of fire box fell away from stay bolts, causing explosion which badly scalded the fireman. Report states that boiler was inspected ten days previously and found in A 1 condition. 56. Crown sheet dropped, injuring 1 person. Accident said to be caused by scale said to have been found on top of crown sheet. 57. Arch flue blew out of flue sheet, badly scalding fireman. Report states that cause of accident is unknown. 58. Arch flue blew out, badly injuring fireman. No cause given. 59. Stud bolt supporting grate of fire box flew out, badly scalding fireman. Report states that fire box was inspected two days before, at which time the stud bolt showed no evidence of leaking. . • j. /: ,. i, ji 60. Twenty or 25 crown bolts gave way, allowing steam to escape into fire box, badly scalding fireman. No cause for the accident stated. 61. Arch-pipe plug blew out, badly injuring fireman. Report states that engine was apparently in good order leaving the terminal. ^ ,, , „ , ,, , , , 62. Crown bolts pulled out, allowing sheet to fall, and 3 persons were badly scalded in consequence. No cause for the accident was stated. 63. Crown sheet dropped, injuring 1 person. Report states that accident was 64. Arch pipe burst, injuring 3 persons. Report states that the mechanical depart- ment said there was no defects in the flue. ^ . . . ., . ..^ .,. 65 Arch-pipe plug blew out of crown sheet, injuring 1 person. Report states that engine was tibiorouglily inspected at terminal the evening before and was found m good ^°66 'Tome cap of engine blew off, injuring 1 person. No cause given for accident. - - ^ - • ° ' " 1 -i n— Ji ij;«~ 1 ^n,=„T, 1^0 cause stated. ) cause given. 67 Arch plus blew out of flue sheet, badly scalding 1 person. No cai 68' Crown an^ side sheets in fire box blew out, injuring 1 person. No ^ ^ 69" Boiler exploded, killing 1 person and injuring 9. Report states that an inves- tigation failed to develop caule of explosion. Engine was carrying only 140 pounds of stiam at the time and was rated at 155. No indication of low water. 70 Crown sheet blew out, injuring 4 persons. Report states that engineer admitted ''riS'llrtur^ld,Tnfuring 2 persons. No cause for the accident sUted. 1390 BOILER INSPECTION. 72. Crown sheet dropped, injuring 1 person. No cause stated. 73. Crown sheet dropped, injuring 1 person. No cause stated. 74. Crown sheet dropped, injuring 1 person. No cause given. 75. Crown sheet dropped, injuring 2 persons. No cause stated. 76. Washout plug blew out, killing 2 persons and injuring 3. The report of the accident states that the boiler maker who was killed was responsible for this accident, on account of attempting to tighten a loose washout plug when steam pressure was on boiler. 77. Arch flue exploded, injuring 1 person. No cause for the accident stated. 78. Crown sheet dropped, causing explosion and killing 1 person. No cause given. 79. Crown sheet dropped, killing 2 persons. Report states that. an investigation developed that the engineer was responsible for the accident and that he was suspended for thirty days. Just in what manner he was responsible is not stated, and no cause for the accident other than this statement is given. As to the necessity for government inspection of locomotive boilers, there are many reasons which tend to show the imperative necessity for such inspection. First. The deaths and injuries from locomotive boiler explosions, as shown by the following table which gives the appalling casualties : Boiler explosions during the period July, 1904, to June, 1909, inclvwie. Trainmen. other em- ployees. Total em- ployees. other per- sons. ' Grand total. Time. t 1 13 1 1 ■d 1 1 ■d 1 5 July, 1904, to June, 1905 38 45 70 S4 53 564 610 768 767 655 10 1 7 4 3 53 41 67 56 55 48 46 77 58 36 617 651 835 823 710 8 1 6 3 2 48 46 77 58 36 635 July, 1905, to June, 1906 652 July, 1906, to June, 1907 841 July, 1907, to June, 1906 826 July 1908 to June, 1909 712 Total 240 3,364 25 272 265 3,636 20 265 3,656 These figures indicate that government action is necessary. They plead eloquently for an effective remedy. No words of mine can mfluence you if these startling figures do not touch your hearts and affect favorably your intelligent judgment. I have previously called your attention to the details of the reports of. such explosions made to the Interstate Commerce Commission. The expense of such inspection should not be a barrier to its enact- ment, when the gravity of the danger to the lives of so many brave men is considered. Human life is of more importance in our country than the necessary expenditure to prevent its sacrifice. No reason- able expense should be spared to prevent the needless killing of men in a useful calling, or to prevent the fearful torture which results from the scalding of such daring men as man the cabs of our locomo- tive engines. The mconvenience to the railroad itself by taldng out of service for a few hours the engine while inspection is being made is too trivial to be considered or seriously urged, when the gravity of the wrong sought to be remedied by this bill is borne in mind. The prevalence of the accidents from locomotive boiler explosions indicates the necessity for legislation which will compel the installa- tion of such s afeguards as shall prove an effectual preventative. BOILEE INSPECTION. 1391 Mr. Baetlett. Would the placing of this duty of inspecting loco- motive engines and boilers under the Steamboat-Inspection Service answer the purpose of the bill 'i Mr. Wills. That has been discussed to a great extent, and it has been thought by those best qualified to judge — at least that is my opinion — that it would be better to place it where the bill provides. That is a matter which has been discussed with General Uhler, who is in charge of the Steamboat-Inspection Service. The railroads have not, when left without regulation upon this subject, proven to have exercised that degree of care in preventing these accidents that the gravity of the situation calls for. It should be noted here that heretofore such deaths and injuries as have occurred from the causes we are now considering have not been of such a nature generally as to call upon the railroads for compensation to the widows atid orphans of the killed or to the injured railroad operators themselves. And while upon this subject, permit me to say that it would be a wise and efficacious method of enforcing a degree of zeal on the part of the railroads to prevent such accidents if a section was added to the bill that in all cases of such death or injm-y in the cab of a loco- motive from explosion or scalding, when the railroads and the man are properly subject to federal regulation, an unconditional right to recover for such deaths and injuries should be given to the man, or, in case of his death, to his dependents. Mr. Baetlett. What do you mean by that, that the railroads should have no defense ? Mr. Wills. When properly regulated by the Government, we say that we beheve it would not be a oad idea to add to the bill that they should have the unconditional right to recover. Mr. RicHAEDSON. What do you consider proper regulation ? Mr. Wills. It would take me considerable time to answer that question. I have not had the time nor the incUnation to figure it out. Mr. RioHAEDSON. It is an important matter. The Government should put the employees on a certain basis if that is done. I just wanted to know what you considered proper regulation. Mr. Wills. I would have to digress a long way from my argument. Mr. Wangee. Have you finished your statement ? Mr. Wills. No, sir. The Chaieman. Proceed. Mr. Wills. We reahze the necessity of having locomotive boilers made as compact as possible, and I thmk it safe to say that no other metal of the same heft demonstrates the abihty to generate the power and go with the machinery that uses it from place to place at such, I may say, frightful speed as that with which our passenger traffic is handled, to say nothing about the heavy freight traffic that is daily moved from place to place at a less rate of speed, and I am sure that we will all agree that those boilers should be built of the laest material obtainable, and every precaution that up-to-date sci- entific and practical knowledge gives should be used m their construc- tion. I am ready to agree that in most cases this is being done, with a view, of course, of getting the best possible financial results for the bondholders of the property, and no one need deny that the rail- road official is selected with a view of "getting results." 1392 BOILER INSPECTION. The boiler is constructed with as much heating surface as is thought to be possible for practical use, and for the size of the same, and, we believe, oftentimes to the detriment of the water space above the crown sheet and flues. One of the reasons why the use of fusible plugs was discontinued was because in the ordinary operation of the locomotive the soft metal would melt out when there was plenty of water in the boiler, but not in its proper place, as I will show. It is well known to all who travel that with the present up-to-date braking appliance, and the speed with which our trains are operated, they are stopped in such a way that a person standing in the back of a car will go to the front if he doesn't put forth power to resist. Now, the water in a boiler does exactly the same thmg, and there being nothing to resist only the uature of water to find its own level under still condi- tions, the water fills the front end of the boiler, and the crown sheet of nearly every locomotive, at a large percentage of the stops that are made, is without water for a short space of tune, and for the reason heretofore explained; and for the same reason fusible plugs are not as much of a success as they were before the use of our present brake equipment. I believe it to be an acknowledged fact that locomotives subjected to the treatment that prevents the successful use of the fusible plugs will in time have weakened crown sheets, and also the back end of the top rows of flues, so far as they are from time to time exposed to the heat of the fire box when water is temporarily absent, and the time comes when the stay bolts pull through and the crown sheet comes down, and you have the result that causes the record as reported to the Interstate Commerce Commission. The railway oflicials who have charge of repairs on locomotive boilers are not liable to replace the crown sheet because it has, to some extent, been weakened by heat on account of temporary ab- sence of water when there are only slight leaks to show it. If com- plaint is made by an engineer it may be said to him: "If you don't want to run that locomotive there are other men who do." I have known men being discharged because they declined to go out on a locomotive when the boiler was in a bad condition; and in one case where they had four men off for having had "burned engines," or as it was put: "We found you with the goods on you." In other words, you were running the engine when it happened. It must be borne in mind that it is only cases where death or injury results that are reported. We don't deny that men who run locomo- tives are human, and as such, do make mistakes, but no one knows better than they the danger of low water in a boiler, and it was said by an official of high standing in discussing this subject before the House committee: Some of our most experienced and most reliable engineers were getting caught once in a while — perhaps one out of three of our best men would get caught once in a lifetime — and when they once were caught, "found with the goods on them," it was then a clear case: They must stand convicted or some one else must be blamed for having allowed the engine to be run in that condition. The master mechanic is the one, in most cases, who decides, and the judge and the jury will naturally acquit themselves. The engineer is discharged, and does well if he gets back, but if he con- fesses that he did it, he may be returned ; or, perhaps, if he had a good previous record, for a long term of years, he may be returned with a loss of from sixty to ninety days off without pay. BOILEK INSPECTION. 1393 I wish to quote from a -well-known and highly respected man who spoke on this subject before the House committee: The question has been referred to me as to why our engineers allow the water to get too low, and there have been several explanations. Some of them no dpubt were correct, but they did not cover all of the explanations as I have had them. Some years ago, due to the fact that we found in oiu- investigations of these low-water cases that some of our most experienced and most reliable engineers were getting caught once in a while— perhaps one out of three of our beat men would get caught once in a lifetime — the thought occurred to us, was it good policy to follow out the plan or policy that was then in vogue of discharging these men who were caught in that way. Oiu" rule was that it a man once allowed the water in his boiler to get low, so far as employment with that company was concerned, he had no hereafter; he was dis- charged, and that was the end of it. We withdrew that policy from ovir manage- ment and took this position, that if the engineer would come to us and tell us in a way that it was reasonably apparent that he was telling us the truth, just how this happened, or his version of how it happened, and there was some truth in that, we would return that man to service without loss of time, making a record against himi and that the second offense would mean dismissal from the service. Now, I desire to ask if you can see any inducements oflFered to an engineer to acknowledge that he did it. The conditions spoken of are in Togue on many roads, but I believe if locomotive boilers were properly inspected four times a year, but few "burned boilers" would be found by explosions or by the inspector, for the ounce of prevention would be used by the railway companies and it would cost much money, and that is, in my opinion, the cause of all this opposition against what we all agree we should have, to wit, thor- ough boiler inspection. I say, let the placing of the responsibUity for the killing and injuring of people come from an impartial author- ity, and that will put it where it belongs and reduce it to a minimum. Mr. Baetlett. May I interrupt you ? Mr. Wills. Certainly. Mr. Bartlett. Suppose this committee and Congress proceeds to enact a law for government inspection; how would that affect the liability of the railroad in case the boiler should explode when it had been reported in good condition by the government inspector when it was not in good condition ? Have you considered that ? Mr. Wills. Not to any great extent; no, sir. I desire to further quote from statements made before the House committee, as follows: We withdrew that policy from our management and took the position that if the engineer would come to us and tell us in a way that it was reasonably apparent that . he was telling us.the truth just how this happened, or his version of how it happened, and there was some reason in that, we would return the man to service without loss of time. Most railway employees know that some one has to be responsible when an accident happens on a railway. Now, if this enguieer is willing to take the responsibility he is acquitted and returned to work without loss of time. What we want is that an impartial investigation shall put the responsibihty where it belongs. If loco- motive engineers can not be taught to protect themselves, but are so careless by nature, education, or some other cause that they "bum" their locomotive boilers and practically commit suicide, often leaving widows and children for some one else to care for, then, I say, let us know it, and let the strong arm of our Federal Govern- ment protect them and the public from present conditions. 1394 BOILBE IBSPECIION. On some of our roads there is a minimum limit of mileage that engines are expected to make before going into the shop for repairs, ^°j ^.''J"'^®'' toTiave some engines make this mileage they are crowded, and slight or temporary repairs are often made, and sometimes when permanent repairs should be made, such as are "burned," from causes as heretofore explained by me, or overheated from any cause, or mud burned, or cracked crown sheet, or both, and the same with side sheets, flue sheets, or throat sheets. Later, that which causes the slight or temjjorary repairs may cause what is known as "low water burned engines," and the man in charge, who will be con- demned, has nothing to do with selecting the judge or jury who decides his case. In all that has been said in opposition to this proposed measure, so far as I know, all have agreed that boiler inspection is a necessity, and none have claimed that a government inspection will increase the cost to the railway companies, only so far as it will take from then- service the use of the locomotive from "three to ten days each three months" (as they state it), in order to carry out what is also claimed by some would be a "superficial examination." Much stress is put on the enormous amount of money it would cost the Government if government inspection should become a law. In my opinion, an inspection could be thoroughly made by an inspector, with such assistance that could and should be given by the railway companies' regular force, and with slight, if any, additional cost to them, so far as the inspection is concerned (but it may cost more for repairs), at the average rate of three locomotives daily. I mean a "thorough" and not a "superficial" inspection, and I am sure that in time it would be shown to be among the most humane acts of our National Congress, such as the safety-appliance law, which was so strenuously opposed by some. I have a petition which I will not take time to read. Mr. Baktlett. File it. Mr. Wills. I shall be glad to do so. (The petition referred to follows :) Resolution Adopted by the Locomotive Engineers' General Committee OP Adjustment, Baltimore, Md., February 10, 1910. We, the general coiiimittee of adjustment of the Baltimore and Ohio Railroad sys- tem in convention assembled, and representing over 2,400 locomotive engineers in active service, do most heartily indorse and support a bill for the proper inspection of locomotive boilers, believing such careful inspection necessary for the safety and health of locomotive engineers and firemen and the welfare of the public. We are in favor of water glasses and other standard appurtenances on locomotives that may contribute to eflSciency of operation of boilers, the safety of the engineers and firemen, and also the preservation of their health from the continual inhding of steam, the saturation of their clothing by dampness while on duty from leaking gauge cocks, broken stay bolts, and other defects, and leaks about the boiler and the danger from valves and other fixtures, and piping insecurely fastened, improperly constructed or placed; besides the obstructing of view by leaking steam, making it very difficult to observe signals and greatly increasing the danger to the employees and the public. We are also desirous that such bill be framed to include a reasonable protection to locomotive engineers from loss of their positions for alleged damage to locomotive boilers by low water when such damage might have been avoided by proper design of boiler and suitable appliances provided for safe operation of boiler, proper washing BOILER IHSPECTION. 1395 -out, and care, or the providing of water suitable for use in boilers under the trying .conditions of railway service. W. W. Puckett, Newark, Ohio; F. W. Warner, Cleveland, Ohio; W. E. Wadsworth, Connellsville, Pa.; F. Pulk, Garrett, Ind.; H. A. Eddy, Lorain, Ohio; C. R. Spaulding, Painsville, Ohio; J. W. Smith, ' Cumberland, Md.; Henry Malone, McMechen, W. Va.; W. E. Evans, Brunswick, Md.; Don C. Smith, Chicago Junction, Ohio; J. L. Shriver, Newcastle, Pa.; Raymond Malone, Weston, W. Va.; B. R. Stull, Baltimore, Md.; B. V. Barnard, Grafton, W. Va.; J. E. McAvoy, Foxburg, Pa.; Jerry CoUett, Philadelphia, Pa.; J. J. Clair, Pittsburg, Pa.; Geo. N. Cupp, Mars, Pa.; F. A. Edwards, Parkersburg, W. Va.; E. F. Augustine, Chicago, 111.; J. B. Liggett, Bridgeport, Ohio; James Dennison, chairman; J. J. Clair, secretary. The Raleigh, Washington, D. C, February 14, 1910. The Locomotive Engineers' Mutual Life and Accident Association has paid for •deaths caused by locomotive-boiler explosions as follows: Death. 1906 7 1907 18 1908 12 1909 „ 11 Total ten years 88 ' Death. 1900 2 1901 4 1902 12 1903 7 1904 6 1905 9 This number comes from those who are carrying our insurance, and that does not include the entire membership. I have not the data at hand from which to furnish figures showing the membership in our insurance department previous to 1907, but in that year there were 49,654; in the year 1908, 55,023, and 1909, 56,463. The mem- bers of our insurance association can carry one, two, or threepolicies each for $1,500. A large per cent of our members carry $4,500 insurance. Tliere are many who carry a single $1,500 policy. Figuring the loss in deaths in our insurance department, due solely to hot water and steam coming from so-called "burned' engines, account of low water," on an average of $3,000 it,will show that our insurance department has paid during the past ten years $264,000. I do not refer to this as being of any importance as compared to the loss of life and the injuries caused by these boiler explosions. H. E. Wills, Asst.G. C.E.B.ofL.E. Mr. Wills. Along the same lines I would like to suggest the fol- lowing: The making of regulations as to when these tests should be made is a matter that will be with the locomotive boiler-inspection board, and should and no doubt will be so made as to carry out the law and its intent, and with the least possible amount of inconvenience to the railway companies. The "thorough external and internal personal examination" should be made while the flues are out and" the jacket and lagging are off, and would be a matter of from two to four hours to make mis examination. This would include the test of stay bolts, because if not all of them nearly all of them could be seen, and the hammer test would not be necessary on but few, if any. The hydrostatic test would have to be made at another time, and when ready to make the test it would take ordinarily from fifteen minutes to one hour. The inspections made as per section 13 may take anywhere from one to four hours; ordinarily one to two hours will do it. It is my opinion that an inspector could average to inspect one engine a day, or 300 per year. Where conditions were favorable he could make three per day; that would be in large shops. There would need be but few days that he could not make at least one. The mspector 1396 BOILEB INSPECTION. and the railway ofl&cial in charge of general repairs would be expected to work together to some extent, so as to assist each other. Now as to cost: Inspector-general, $5,000; 5 district inspectors, $15,000; 200 local inspectors, $360,000; each local inspector ($100 per month expenses), $240,000; 7 clerks, $8,400; other necessary- expenses, $121,600; total, $750,000. In the event it should be necessary to employ 25 more local inspect- ors, in order to do the work as provided for in section 13 of the bill, same would cost $75,000, including expenses, and that would leave for other necessary expenses $46,600. I believe if this law is enacted and $750,000 appropnated it will reduce the accidents one-half, and save at least 120 lives and prevent the injury by hot water and steam of at least 1,828 persons. Mr. Baetlett. If there are 60,000 engines and one inspector can inspect 300 a year, it would require 200 mspectors ? Mr. Wills. Yes, sir. Mr. Richardson. It is very unfortunate, because there is a spasm of economy on in the country at this time. Mr. Wills. I think there is also a disposition to economize at the loss of life, and I hope you gentlemen will not overlook that. It will also save to the service of the railway companies with good records many of its most faithful, loyal, and trusted employees and servants, men, some of whom, have done much to make the railway companies and railway managers what they are to-day. This, in many cases, instead of having their names recorded on the books of one of the departments of this great Government, that should be "a government of the people, by the people, and for the people." Now, these men are shown as derelicts, if not worse, as 44 deaths and 62 injuries are shown by the reports filed by the railway com- panies charged to either indifferent or incompetent locomotive engineers. I would like to say a word in explanation of another question that was asked at the last hearing. On most roads, under present con- ditions, freight locomotives are run first in first out in freight service, and engineers the same, and there may be 6, 8, or 10 more engineers than engines. In passenger service two engineers may be assigned to one engine, or three engineers to two engines is often the case, and as a general rule the engineer does not know what engine he is going out on. Forty years ago when it cost nearly as much to paint a passenger locomotive as it costs now to build one, the pendulum swung too far one way, now it has gone as far the other way._ And again, I wish to repeat, if the engineer is guilty, as indicated by the reports filed with the Interstate Commerce Commission, then let a government official who is in no way beholden to the railway companies or the engineers investigate and render the decision. Present methods are unfair and unjust. I wish to appeal to you on behalf of 65,000 members of an organi- zation of loyal and law-abiding citizens of this great country, who compose one of the most conservative organizations, and perhaps the most conservative and powerful in our country to-day, to grant us the relief we seek by this bill. Again, I wish to say that in many cases ambition is overriding judgment and we are not receiving the protection from our employers that we are entitled to. We ask and BOILEE INSPECTION. 1397 pray that our lives and limbs and reputations be given just protec- tion; only justice. I thank you. The Chairman. We set this meeting principally because there were some gentlemen from out of the city who wished to be heard. It appears that there is no one here from out of the city who desires to be heard. There are some gentlemen from out of the city who have applied to the committee for a hearing, but it was not practi- cable yesterday to notify them of the meeting this morning. So the matter will be left in abeyance for the committee to determine here- after. (Thereupon the committee adjourned.) Committee on Interstate and Foreign Commerce, House of Representatives, Monday, May 16, 1910. The committee met at 10.25 o'clock a. m., Hon. James R. Mann (chairman) presiding. The Chairman. The committee will be in order. We, are pre- pared to hear the gentlemen in behalf of the locomotive boiler inspec- tion bill. Mr. Roe. Mr. Chairman, I would like you to hear Mr. Jeffery. STATEMENT OF ME. H. S. JEFFEEY. The Chairman. What is your business ? Mr. Jeffery. I am a boiler maker by trade. I have had sixteen years' experience in designing and construction and repairing of boilers. The Chairman. What is your business at present? Mr. Jeffery. Consulting engineer. The Chairman. Where ? Mr. Jeffery. Located in Richmond, Va. The Chairman. Whom do you represent here now; anybody especially ? Mr. Jeffery. Nobody in particular. The Chairman. You appear at the request of Mr. Roe ? Mr. Jeffery. Mr. Roe asked me to appear here first to-day. The Chairman. On the locomotive boiler inspection biU? Mr. Jeffery. Yes, sir; on the locomotive boiler inspection bill. Mr. Bartlett. You are a consulting engineer ? Mr. Jeffery. Yes; on boilers and engines. I am a boiler maker. Mr. Bartlett. I beg your pardon ? Mr. Jeffery. I have had sixteen years' experience in designing, construction, and repair of boilers, especially locomotive boilers. In the past I have held important positions with boiler manufacturing concerns, locomotive manufacturers, and railroads, and I desire to speak of matters that have come under my observation, and also to make a brief reply to some statements that have been made by par- ties that are opposing the bill. Mr. TowNSEND. What railroad experience have you had 1 1398 BOILER INSPECTION. Mr. Jeffery. I served jny time with the Seaboard Air Line Rail- road; I was j&ve years with the American Locomotive Works of Rich- mond, Va. , building and rep airing locomotive boilers ; and I worked for the Louisville and Nashville for about six months — not quite six jnonths, but pretty near — altogether close onto ten years, you might say. Mr. Bartlett. You say you served your apprenticeship ? Mr. Jeffery. Yes ; with the Seaboard Air Line Raikoad. Before the subcommittee of the Comcmittee on Interstate Commerce of the United States Senate, Mr. Kendrich, vice-president of the Santa Fe Railroad, made the following statement. 1 read from page 86 of the hearings before that subcommittee : Of all the boiler explosions occurring on 134 roads owning 34,610 engines from January 1, 1905, to November 1, 1909, resulting from any cause whatsoever, 98.7 per cent were due to the carelessness of the men running them in permitting the water to run low, and no law could reach and prevent such casualties. Such a statement, Mr. Chairman, is inaccurate and unfair, and, coming from a foremost railroad man of the country, is both fortunate and unfortunate. As will be noted, this statement covers 134 rail- roads, and gives the percentage at 98.7 per cent. Now, there is an association in the LTnited States called the International Master Steam Boiler Makers' Association. It is not a labor organization or a secret society, but it is an organization formed for the betterment of boiler work. I might say that possibly 90 per cent of the railroad foreman boiler makers belong to this association. Two years ago they appointed a committee to look into the subject of boiler explosions and make a report, and I will read from the official pro- ceedings of the second annual convention of this association, held in Detroit, Mich., May 26, 27, and 28, 1908. They assigned the fol- owing reasons: (1) Defective design, resulting in weakness of parts, defective circulation, faulty arrangement of braces and stays and other matters over which the designer has control. One would naturally think that the designer of the locomotive boiler would be one who was familiar with it, and had some famil- iarity with the construction, repair, and operation of a boiler, but I am sorry to say that that is not the case throughout the country. A great many men designing boilers have no practical experience. They are what you might call technical men, or what I would call bookish men, copyists, and they copy from one to another these ■designs mistakes and all. Unfortunately these men do not cooperate with the men who operate the boilers; there is no cooperation between them at all. When I was at Richmond, Va., the Baltimore and Ohio Railroad placed an order there for forty-odd boilers of different designs. The ■drawings came down, and on looking the drawings over I noticed that the pitch of the stay bolts was such as to render the whole boiler unsafe, and I sent the designs to Mr. Dupr^, and he in turn took the matter up with Mr. Gillis, who was superintendent of the locomotive works at Richmond, Va., and they communicated with the Baltimore and Ohio Railroad, and the Baltimore and Ohio Rail- road replied to go ahead and build the locomotives exactly according to the drawings and specifications, which we did. I had no authority to cancel the order or to do any thing about it, and they said to go ahead and build the locomotives, which we did. BOILEB INSPECTION. 139& Some time later Mr. Gillis sent word to come to the office, and he made inquiries in reference to the boilers, saying that he had a com- plaint, it appears that a boiler had exploded, killing two or three men, and they wanted to lay it to the faulty construction; but as a. matter of fact it was on account of the faulty design. I merely mention that to show you that having reported this and given them an opportunity to correct it, they did not avail themselves of it and it went through. If railroad locomotive boilers were under inspection as steamboat Doilers are at present, that would have been impossible;^ it would have been taken up with the government inspector, and he would have stopped it right there. The boilers would have been redesigned, and they would have been positively safe, and probably that explosion would have been prevented. The second clause reported to this convention of the International Master Boiler Makers' Association, and accepted by them, was : 2. Poor construction,, including defective material, faulty workmanship, omiseion of braces, stays, etc. It would hardly seem possible that the foreman boiler makers, would make a report of faulty construction when it lies presumably in their power to do good construction. When I was with the L. & N. Railroad, about five years ago, we endeavored to do the work right, but the time set on a good deal of the work was so limited that we could not make the repairs as they should have been made. It was. not an uncommon occurrence for a locomotive to come in what we call the back shop — that was the main shop — and on the smoke box would be stated the time the engine arrived and the time it ■ypas tO' go out. Rarely was I consulted, as head of the boiler department, as to the extent of the repairs that should be made. It appeared, that the repairs would be made in accordance with the time that they wanted the engine, and we have let many a boiler go out of the Louisville and Nashville shops in Kentucky that was not as thor- oughly repaired as it would haye been had the locomotive been retained in the shop as long as it should have been. Sometimes I protested, and in other cases I did not. I did not take the matter up- with the superintendent of motive power, but with my superior officer and let the responsibility rest there. Other times we had locomotives come in from the roundhouse for what we called running repairs, stay bolts were leaking and flues were leaking, and we fre- quently had to put in sal ammoniac and horse manure and sawdust, and that would tide the locomotive over for a trip or two. Another boiler would come in and we would test the stay bolts, and we would report 10, 20, 30, 40, and 50 defective bolts. Sometimes we would take them out and sometimes we would not. That would depend upon the time we had. It was not because we did not have force enough, but because they would not take the engme out of service long enough for the repairs to be made. Mr. Bartlett. Were you the head of that department at that, Mr Jeffery. Yes. I took these matters up with the assistant master mechanic, time and time again, but all the business I did with him was done on paper. I had to make a report to him on paper, and he sent back replies. Sometimes I would get from him 50 letters a day sometimes 60 letters a day. It was all on paper. I had some ot 1400 ' BOILEB INSPECTION. those reports, but^when I left the road they were the property of the raUroad and I left them behind. Mr. Stafford. The difficulty you speak of was not governed by their not having a reserve force ? Mr. Jeffery. On certain classes; yes, sir. Mr. Stafford. Have you any knowledge as to the practice among the railroads as to having reserve engines to take the place of engines that need repairs ? Mr. Jeffery. From my personal knowledge, of course, I can only speak for the railroads I nave been connected with; but I have a number of statements here from other parties, which I intend to fut in the record, which I believe will cover that. But personally will have to speak, of course, just for the railroads with which I was connected. On the Louisville and Nashville Railroad, with some classes of engines we seemed to do all right, but other classes we did not. The Chairman. How long were you with the Louisville and Nashville road? Mr. Jeffery. Possibly six months. The Chairman. What was ypur position there ? Mr. Jeffery. General foreman boiler maker. The Chairman. And you let these engines go out in that condition ? Mr. Jeffery. Yes, sir. What could I do ? How could I help myself ? The Chairman. That is not what I asked you. You did do it ? Mr. Jeffery. Yes, sir. The Chairman. What did you leave for ? Mr. Jeffery. I protested to the master mechanic on occasion after occasion about these conditions, and there arose some friction between us, he taking the position that if I held up the engines and tied up the boiler work, they would never move the trains; and finally I became pretty well disgusted with the way things were going, and I secured another position, and left. I went direct from the Louisville and Nashville to the Davenport Locomotive Works. The Chairman. At Davenport, Iowa ? Mr. Jeffery. Yes, sir. The Chairman. How long were you there ? Mr. Jeffery. I remained there a year. Mr. Sims. Have you finished reading that report ? Mr. Jeffery. No, sir; I have only read two parts of it. Mr. Bartlett. When you were calling the attention of the master mechanic to the fact that these engines were not sufficiently repaired, what would he say ? Mr. Jeffery. Well, he would just simply say, "We have got to move the trains." Mr. Bartlett. One other question, and then I will not ask anything further. Do you recall that any explosion or accident or casualty occurred during that time from any or those engines that were insuffi- ciently repaired which had been brought into the roundhouse, into the shops, for repairs, and which were not permitted to be repaired because they were not left there a reasonable length of time, or by reason of the fact that the master mechanic did not permit you to make the necessary repairs ? Did any accident occur in that way ? Mr. Jeffery. We did not have any boilers blow up, j^ou might say, in their entirety. BOILEE INSPECTION, 1401 Mr. Bartlett. I did not mean that; that need not occur. Did any of those engines that were brought into the engine house for repairs and were not sufficiently repaired cause any accidents or casualties, whether they were serious or minor, during the six months you were there ? Mr. Jeffeky. The only accidents — what you might term acci- dents — were from sending boiler makers into these boilers with 50 or 100 pounds of steam on to calk leaks, and the hot water squirting on them. Mr. Bartlett. You do not understand my question. Mr. Jeffert. Well? Mr. Bartlett. What I ask you is, whether you recall that any of those engines, during the six months you were there, which had not been repaired as they should have been by reason of the fact that you were not given sufficient length of time, because they were pressed for the need of the engine, had any accidents; if there was any acci- dent to an engine, serious or otherwise, while on the road, which had been in the shop for repairs and had not been repaired. Do you recall any such ? Mr. Jeffery. No such accident occurred while I was there, but they might have occurred after I left. The third cause given in this report to the convention is : 3. Decay of structure with time, or in consequence of lack of care in its preservation, local defects due to some cause, as to some unobserved leakage that produces deteri- oration. Taking up that phase of it, speaking from my personal experience of it, we had a lot of boilers come into the L. and N. shops — and I have a lot of statements here that the same is true of other places — where we did not inspect the boiler thoroughly. You can not in- spect any boiler thoroughly unless you go inside of it and ex>amine it. Some boilers are so constructed, unfortunately, that you can not ex- amine them. I have some specifications here of the Southern Rail- way, and the official specifications of numbers of these boilers show that no man can enter those boilers to save his life. Those boilers could not be inspected, for the reason that you could not go in them. It has been stated by the superintendent of motive power of the Louisville and Nashville Railroad that you could simply stand on the outside and observe the inside; that it was not necessary to go inside. There is a plate right over in the comer of the room there, taken out of a boiler, and you can look on the outside and that plate seems to be in good condition, with no possible defects such as cracks, or any marks of that kind; but you look on the inside, and you can see cracks and these other marks. That is only a portion of a boiler, but it gives you a pretty good idea of what may happen all over the entire boiler, or in certain parts more prominent than other parts. Mr. Bartlett. Did that boiler blow up ? Mr. Jeffery. No, sir; they fixed that before it did blow up. That was taken out of a boiler recently. I just brought that to show you why it is necessary to inspect a boiler on the inside. The Chairman. If they could not inspect that boiler on the inside, how did they come to take it out ? Mr. Jeffery. They could inspect that particular boiler on the inside. That was not one of those which they could not inspect 1402 BOILBB INSPECTION. inside. I mereljr brought that plate here so that you could under- stand the necessity of these boilers being so constructed that they could be inspected on the inside. Mr. Sims. A boiler that could not be inspected inside could not be reached any more by a government inspector than by any other. Mr. jErFERY. They could turn around and take those boilers that they have of that kind — they have not many — and reconstruct them; and that is one reason possibly why they oppose the bill, because they know they would have to do that. Furthermore, when these boilers wear out, instead of taking the boilers that are properly constructed, and ordering new ones by them, they send to the plant and have the old boiler duplicated, with all its defects, instead or having that boiler reconstructed so that it could be inspected. Mr. Sims. The bill we are considering does not prohibit the boilers that can not be inspected from the inside, does it ? Mr. Jeffeey. I should think so. Mr. Sims. I am asking for- information. Mr. Jefpeky. Yes; it prohibits the use of boilers that can not be thoroughly inspected. There are some parts of a boiler that possibly could not be observed from an internal inspection, but the greater part of a boiler could. The Chairman. What is the general type of the boilers being turned out by the Baldwin or other large locomotive works, as to whether they are capable of being inspected from both within and without ? Mr. Jeffeey. At the present time most of the boilers are of the wide fire-box type. There are various types. The majority of boilers are now oeing constructed so that they can be mspected internally; but there is another handicap there. To go inside the boiler necessitates the removal of the dome cap and in some cases the removal of the standpipe, so that when you get a pig-headed fore- man — excuse the expression — who will not permit that dome cap to be removed because he has got to have that engine out, that inspec- tion will not be made, and the result will be that the longitudinal and other braces of the boiler may be broken, and the defect never noticed, and the result is that the boiler blows out when there is low water. The Chaieman. Will you please proceed as rapidly as you can. The time is very limited, you know. Mr. Jeffeey" The fourth cause reported to the Master Boiler Makers' Association was : 4. Last, but not least, is management in operation, giving rise to excessive pressm'e, low water, or the sudden throwing of feed water on overheated plates, or the produc- tion of other dangerous conditions, failure to make sufficiently frequent inspection and test, and thus to keep watch of these defects which grow dangerous with time. I wanted to touch on this, Mr. Chairman. I have a plate here that represents a portion of a boiler [producing plates with stay bolts]. This is to represent the outside wrapper sheet, and this the fire-box sheet [indicating], and these are the stay bolts. These stay bolts are to support these sheets, so that they will not be subject to deforma- tion. This, if subjected to pressure too great, will make these stays bulge and pull off, but in the majority of the boilers the stays are properly spaced to support the sheets satisfactorily. These stay bolts break, due to the expansion and the contraction of the sheets, BOILER INSPECTION. 1403 which swell with the heat and then reduce again as they cool. These stay bolts are tested by a man tapping oh the fire side, this side [indicating] of the boiler, and ascertaining if any of the bolts are broken or fractured. A broken bolt is one that is broken entirely through, and a fractured bolt is one that is broken not entirely through. A freat many boiler makers claim that they can ascertain a fractured olt by the hammer test, but when they make an internal inspection afterwards they find that they are very much mistaken. Some of the boiler makers state that an internal inspection is not necessary. I have a number of statements that I am going to place before the com- mittee from foremen boiler makers that they have made public utterances before conventions and other places, and I do not know of one foreman boiler maker in this country, except those owned body and soul by these companies, that contends that you can find a fractured bolt by this test. You can find a broken bolt, but not a fractured bolt. Mr. TowNSEND. How would you test for this ? Mr. Jeffeey. Just make the inspection and make the hammer test, and by making both tests you will find all that a man can find. Mr. TowNSEND. You could not get in between those plates ? Mr. Jeefery. Oh, no. A man goes inside a boiler and takes a stick with a torch, or a light of some kind on the end of it and gets the light right down on these bolts. ' Mr. TowNSEND. Suppose a bolt is fractured between the plates ? Mr. Jeffery. There is a watermark every time where there is a fractured bolt. You put your light down there, and you can see it, where the bolt is fractured. Now, they have a little hole drilled down through here in these bolts that they call the tell-tale hole and if the bolt is fractured, steam will ooze out of here and give warning. When these bolts are fractured they just take that hole and put a nail in it and stop it up. That does not replace the fractured bolt, but it does stop the leak, and away it goes, in that fashion. Mr. TowNSEND. Now, as I understand, your answer to the gentle- man is that it is not because of the negligence or carelessness of the engineer, but by reason of faulty construction? Mr. Jeffery. It is partially by faulty construction and partly by lack of thorough inspection, and lack of making repairs after defects are known. We found all classes of defects, but we could not repair them as they should be repaired. Mr. Bartlett. There is nothing in this bill that specifically requires inspection from the inside — that you shall have boilers so that they can be inspected from the inside — that I can find. Mr. Jeffery. Well, now, Congressman, I think you will find it there. It speaks of an internal and an external inspection. Mr. Bartlett. It provided for a proper inspection by a man skilled in that line. Mr! Bartlett. Besides, the Interstate Commerce Commission can make proper regulations for further mspection. -,-,,, a Mr. Jeffery. I have a letter here from the Hartford Steam Boiler Inspection and Insurance Company, signed by the secretary, and he expresses great surprise that the vice-president of the Santa Fe system should say that 98.7 per cent of all boiler explosions 23738— PT 26—10 3 1404 BOILEE INSPECTION. were due to the carelessness of the men running the engines, in permitting the waterjto run low. He says: No such percentage of stationary boiler explosions is due to carelessness of the attendants. Mr. Faulkner. Would you let me ask you whether that is not simply with reference to stationary boilers, and not with reference to locomotive boilers ? Mr. Jeffery. He makes mention of the statement of the vice- president of the Santa Fe road, and then says: I am surprised at the statement of the vice-president of the Santa Fe system in stating that "98.7 per cent of all the boiler explosions occurring on 134 roads were due to the carelessness of the men running them, in permitting the water to run low." (P. 86; taken from S. Doc. No. 446.) Mr. Faulkner. But his company is an insurer only, and an inspector only, of stationary boilers. He knows nothing about locomotive boilers. Mr. Jeffery. I want to put in the record this list of boUer explo- sions of locomotive boilers, said list being furnished me by the Hart- ford Steam Boiler Inspection and Insurance Company. It covers 66 boiler explosions since August 22, 1908. Mr. Faulkner. How did they get that information ? They do not insure locomotive boilers and do not inspect them. Mr. Jeffery. I do not presume they insure them. Mr. Faulkner. How did they get the information, now? Mr. TowNSEND. If the witness will proceed we will hear the other side later. (The list of explosions referred to will be found appended to this hearing.) Mr. Jeffery. Referring back to the statement I was just about to read when Mr. Faulkner interrupted me, I have a statement here from Mr. A. Hinzman, from Kansas City, Kans. This statement I will read. It is as follows: Kansas Citt, Kans., March 27, 1910. Mr. H. S. Jeffery, Washington, D. C. Dear Sir: Whereas I note that R. E. Smith, general superintendent of motive power of the Atlantic Coast Lines says that a statement in regard to 400 defective stay bolts in a boiler is an "absurdity," I send you full data about boilers of the Bock Island Railway System. Following is a list of engines with broken and fractured stay bolts removed at the Rock Island Railway shops, Armourdale, Kans. : Engine 1917 was in shop November, 1908, and 364 bolts were removed. Nearly 300 were broken and the balance fractured. Engine 1927 was in the shop December, 1908, and 406 bolts were removed. About 300 were broken and the balance fractured. Engine 1918 was in the shop March, 1910, and 125 bolts were removed. About 80 bolts were broken and the balance were pulled through the sheet. Engine 1916 in February, 1910, was in the shop and 106 bolts, all broken, were removed. Engine 1924 was in the shop March, 1910, and 210 bolts were removed. There were 130 broken and the rest fractured, etc. There were 18 bolts in one nest and the sheet bulged. Engine 1901, February, 1910, was in the shop and 49 broken stay bolts removed. Engine 1318 was in the shop April, 1908, and 125 defective bolts removed. There were 110 broken and the balance fractured. All the above relate to only one road and to boilers of locomotives repaired at the shops stated. Yours, very truly, \ A. Hinzman. BOILEE INSPECTION. 1405 I have here a statement also signed by Mr. O. A. Clark. Mr. Bartlett. This list is not signed. Mr. Jeffery. That is from the official records. I just wrote that out from the official records. O. A. Clark makes the following statement : \ Washington, D. C, March t8, 1910. Mr. H. S. Jeffery, Washington, D. C. Dear Sir: Agreeable to your request for a statement on my part as to what I know about the past and present condition of locomotive boilers, together with a brief state- ment about myself, would state that I am a practical boiler maker of ten years' experi- ence in the construction and repairing of steam boilers, and have worked for the following railroads: Seaboard Air Line Railroad, Baltimore and Ohio Railroad, Norfolk and Western Railroad, Southern Railway, and the Louisville and Nashville Railroad. I am at present employed by the Southern Railway and I am stationed at Birming- ham, Ala., and have been in their employ for the past fourteen months; also worked for them several years ago for a period of thirteen months. I know in a general way wliat practically every boiler maker knows, and that is: Boilers are frequently in service when in an unfit condition, and it is the practice throughout the country — at least with the tailroads that I have worked for — to plug the telltale holes of stay bolts when steam and water from within the boiler finds an outlet by means of them. When 1 was in the employ of the Baltimore and Ohio Rail- road, which was in 1904, they furnished special plugs and tools for the purpose Just imagine that, special tools to plug up these holes, after they have put them in there to find the defects. When I was in the employ of the Baltimore and Ohio Railroad, which was in 1904, they furnished special plugs and tools for the purpose, and I have in accordance with orders issued by the foreman plugged holes to the extent of 30 in a single locomotive, boiler in a month, and plugged m practically every locomotive boiler in service on that division from 5 up. I was employed by the Louisville and Nashville Railroad in 1905 That was the same time when I was there — and was stationed at Birmingham, Ala., and while in their employ I saw a locomotive boiler with 72 broken stay bolts in one nest, and the sheet was bulged about 2 inches. I also saw a number of engines — or rather there were engines on that division — the boilers of which had from 30 to 100 broken stay bolts and with nests of 6 to 10 Jjolts, and the locomotives were practically in constant service. They were taken out of service for only a short period, and only long enough to remove a portion of the broken stay bolts, only sufficient to save the sheet from deformation. I want to say that when I was with the Louisville and Nashville KaUroad, when I would find a boiler with 30 or 40 of such bolts, and they were congregated together in one nest, we frequently, to save the sheet from deformation, were permitted to take out a bolt here and another there, scattered around, and replace them, and then when there was opportunity the inspector would go in and mark the bolts with a center punch mark, so that we would know them again and we would not have to do the whole thing over, and he would fre- quently come to test the bolts, and find the bolts he marked in the first instance, the other bolts he tested the first time, were still in there. This affidavit continues: Time and space do not permit stating at length or fully in regard to all that I have seen, but I do know that the "dope cure" is used extensively by raikoads, and I further know that "fractured stay bolts" can not be found by the hammer test, and I have yet to see the man that can detect "fractured stay bolts" by the _ha,mmer test. Regarding boilers that are so constructed that an internal inspection is impossible, would state that thirty-seven and thirty-eight hundred class of the Southern Railway are so constructed. 1406 BOILER INSPECTION. Mr. Baetlett. You mean 3,800 engines? Mr. Jeffery. That is the class of the engine; that is the number of it. Mr. Bartlett. The number ? Mr. Jeffery. , Yes. The other railroads as given above have'inany locomotive boilers so constructed, but I am unable to recall their class number. This young man's statement is substantiated, because here are the official records. Mr. Stafford. Do you know whether those classes named are of recent construction ? Mr. Jeffery. I can tell you by looking at the record. Mr. Stafford. Do you know what proportion of the engines is of those classes as compared with all other locomotives ? Mr. Jeffery. He just mentioned the thirty-seven and thirty-eight hundred classes here, and the record is here; 3848 to 3851, inclusive, seem to have been constructed, according to this, from November 29, 1898. Mr. TowNSEND. Do you know whether it is the duty of an engineer operating an engine to report defects ? Mr. Jeffery. Only such as he has knowledge of. That is his duty, to report them on the report at the end of the trip. Mr. TowNSEND. Can you state whether he is responsible for run- ning an engine unless it has been repaired ? Mr. Jeffery. The engineer has no means of knowing when the stay bolts are replaced. Mr. Townsend. I am talking about the defects he notes. Mr. Jeffery. Yes. Mr. Townsend. Suppose he notes a defect and reports it. Do you know of his running that engine after he had reported the defect ? Mr. Jeffery. Yes, sir; on the Louisville and Nashville Railroad. I have had engineers come to me and ask: "What did they do with those stay bolts that were leaking at the telltale hole ? Did you take them out or rivet them over?" We would never tell the engineer what we had done. They make inquiries of that type. Mr. Richardson. When that boiler is originally constructed is there not some method and mode and manner of determining what the ratio of pressure is to the square inch ? Mr. Jeffery. Yes. Mr. Richardson. What is it ? What do you call that ? Mr. Jeffery. Thiere is the bursting pressure and the working pres- sure. There is a rotio of 5 to 1 between them ordinarily. Mr. Richardson. Bursting pressure ? Mr. Jeffery. Yes. Mr. Richardson. And the working pressure ? Mr. Jeffery. Yes. Mr. Richardson. Those are the two tests ? What is the difference between the hydrostatic pressure and the working pressure ? Mr. Jeffery. Let me get your question clear. You mean the man- ner of testing ? Mr. Richardson. Yes; the manner of testing. Mr. Jeffery. The hydrostatic test is to apply cold water and pump the boiler up until you get a certain pressure. BOILEE INSPECTION. 1407 Mr. Richardson. What is the result of that test, to the square inch, on the boiler ? Mr. Jeffeey. One and a half to one. Mr. Richardson. What is the working pressure to the square inch? Mr. Jeffery. Five to one, ordinarily. Mr. Richardson. If a boiler explodes, how can you tell whether that was complied with or not ? Mr. Jeffery If a boiler explodes, there is bound to be a rupture at some point. Mr. Richardson. I know; but I am asking, if it does explode, can you tell whether it complied with the test in the beginning ? Mr. Jeffery. Applying the hydrostatic test to a boiler does not always find the defects. I recall one boUer where we applied the hydrostatic test and to all intents and purposes the boiler was in food condition. It happened, though, that one of the side bars that old up the grates was broken, and I was working then as a boiler maker and I was instructed to take out that side bar and replace it. And when I took the side bar out there was a big pile of ashes up in one corner, and I brushed that down with my hammer, and then I noticed there was a big piece of scale up in there and I knocked that off with my hammer, and when I did that the water ran out of the boiler. Mr. Townsend. What did that indicate ? Mr. Jeffery. That the boiler at that point had deteriorated and been eaten out. Mr. Townsend. Did it suggest that it had not been subjected to the proper test ? Mr. Jeffery. No ; the ratio test had been put on there, but it indi- cated that a thorough inspection had not been made. If it had been, they would have gotten that. In making any ordinary inspection we would not have bothered with that if it had not been that the grate bar was broken. Mr. Townsend. Just from a common-sense standpoint, do you not admit that the incentive is just as great upon the railroad to have these boilers made perfect as it is on anyone else, or even greater ? Mr. Jeffery. They make them perfect enough, but they do not try to keep them so. Mr. Townsend. You can not get anything perfect in this life, no matter what care you use. Mr. Jeffery. They do not use the best they can. Mr. Townsend. Is it not to their interest to do it ? Mr. Jeffery. Certainly it is to their interest. Mr. Townsend. In money and men ? Mr. Jeffery. Certainly it is to their interest to do so. Mr. Townsend. Money interest ? Mr. Jeffery. Yes; money interest. Mr. Bartlett. The same question would apply to steamboat boilers, would it not ? Mr. Jeffery. Yes; but the steamboat people opposed the steam- boat-inspection bill when it was here. liifr. Bartlett. But I say it is just as much to the interest of the owners of steam vessels that their boilers should be properly made ? 1408 BOILER INSPECTION. Mr. Jeffery. Yes; it is to the interest of every person that the boiler should be properly made. Mr. Miller. I was not here when you were discussing the question of accidents that occurred in 1908, or rather the number of boiler explosions. How many did you say occurred during the year 1908, or about what number ? Mr. Jeffery. There were 66, if I recollect right. Here is the list. Mr. Miller. Can you tell whether those explosions were due to defects of the engines, and if there had been the proper kind of inspection, whether those explosions would have occurred or not? Mr. Jeffery. I have no personal knowledge of that lot of explo- sions, as to what caused them or what would have prevented them. Mr. Miller. Have any of you representing the people who want inspection of boilers any information as to the number of deaths or the total number of people injured in the United States in the year 1908 in those 66 explosions that occurred ? Mr. Jeffery. I could not tell you about the year 1908, but the Interstate Commerce Commission has reports made by the railroad companies showing that in the five years ending, I think, in 1909, there were about 365 men killed and upward of 3,000 injured; that is, of their own employees, I believe. That is a volunteer report I believe, on their part. Mr. TowNSEND. Now, if you can just touch the points that you wish to make certain, and insert what else you have in the record, you will give the other men who are here an opportunity to be heard. I do not want lo shut you off, but we want to hear as nxany men on as many different phases of the subject as possible. Mr. Jeffery. Here is a statement that I want to read, signed by a boilermaker, G. Kraft. This statement is as follows: Alexandria, Va., March 29, 1910. Mr. H. S. Jepfeey, Washington, D. C. Dear Sir: I desire to state that in 1904, when I was in the employ of the Baltimore and Ohio Railroad Company, I inspected engine 1956, and finding the boiler in an unfit condition, made proper report to the night roundhouse foreman (I worked on the night shift), but he gave me to understand that he was a mechanic, and he, the round- house foreman, permitted the locomotive to go out on a trip, the boiler exploding and killed the fireman and brakeman, also injuring the engineer (now resides in Baltimore, Md.), he losing a leg. This locomotive was almost new — that is to say, had been received from the manu- facturer only a few months before. When I examined the fire box I found the crown sheet down about 2 inches, starting about two rows of bolts from the front and extend- ing back to within about six rows of the door sheet. It was down, generally speaking, the full length of the box. I positively know that this explosion was due to a defective boiler, which I reported to the proper official, and he overruled me and sent the locomotive out on the road, and two men to their graves. Yours, very truly, G. Kraft. I have talked with that party myself, and he told me that the day after that explosion the officials had him come to their ofl&ce, and told him what a good man he was, and how they were going to give him a life job and promote him, and everything else, and after they told him all those nice stories, then they wanted him to tell that the cause of that boiler explosion was not any negligence on the part of their oflBicials ; and when he declined to do so, he was discharged, and has remained so ever since, practically blacklisted. Mr. Bartlett. Was he on the engine when it exploded? BOILER INSPECTION. 1409 Mr. Jeffery. No, sir; he was a boiler inspector, and he inspected this boiler and reported it in poor condition, and the officials let it go. That explosion cost the railroad company about $10,000 damages for each man killed. I have another statement here from E. K. Corn. This reads as follows: Washington, D. C, March 28, 1910. Mr. H. S. Jbffery, Washington, D. C. Dear Sir: Concerning what I know in regards to the condition of locomotive boilers of such railroad companies that I have worked for, would state that I am a practical boiler maker of nine years experience, and have worked for the Chicago and Alton Railroad, the St. Louis and San Francisco Railroad, the Sante Fe Railroad, and the Southern Railway Company, and I am working for them at present at Spencer, I have known of many boilers in service with broken stay bolts, plugged flues, tell- tale holes, etc. The "dope cure" is also used, 'and I have seen many boilers that were so constructed that an internal inspection is impossible. I recall when I was on the Sante Fe Railroad considerable trouble was experienced with a certain class of locomotives in regards to certain stay bolts breaking. Finally they concluded to get around the difficulty by removing the bolts and plugging the holes. Naturally such a method did not appeal to me, or to anyone else that desired to thoroughly upkeep boilers, but the others and myself did what we were ordered to do, knowing full well that it was not right; but they, of course, and not the boiler makers axe responsible. Yours, very truly, E. K. Corn. Mr. Richardson. That other man that signed that other paper here; where is he now? Mr. Jeffery. This man is working at Alexandria, Va., at the South- ern Railway shops. Mr. Richardson. He is still in the employ of the railroad company ? Mr. Jeffery. At this very moment, so far as I know. Mr. Faulkner. I would like to know where the originals of these statements are. These are not the originals? Mr. Jeffery. Sure; they are all there, copied. Mr. Richardson. Where are the originals ? Mr. Jeffery. They made their statements and they were written out and they signed them. These are their signatures. Mr. Bartlett. These are the originals? Mr. Jeffery. These are the originals; yes. The Chairman. You have a lot of those statements there. You had better put them in the record. Mr. Jeffery. I will put them in the record. I have statements here from foremen boiler makers throughout the country. I would like to put them all in the record. There is one more thing I wanted to comment on, and that is, the superintendent of machmery of the Louisville and Nashville Railway stated before this committee that it took from three to ten days to thoroughly inspect a locomotive-engine boiler. There is not a loco- motive boiler in this country, properly constructed, that will require over five hours to thoroughly inspect it. The Chairman. With any kind of an inspection? Mr. Jeffery. A thorough inspection of any locomotive boiler can be made in five hours, at the utmost. The Chairman. With any kind of inspection ? Mr. Jeffery. I do not just quite grasp your point. Mr. Bartlett. He says, a thorough inspection ? Mr. Jeffery. A thorough inspection — complete. The Chairman. There are different kinds of inspection. 1410 BOILER INSPECTION. Mr. Jeffeet. Yes; we make a lot of fifteen-minute inspections. The Chairman. You say any kind of inspection can be made within &V6 hours ? Mr. Jeffery. Yes. Mr. Richardson. That is, you mean the most complete and thor- ough inspection can be made within five hours ? Mr. Jeffery. Yes. Mr. Richardson. The other man who was before the committee stated it would take ten days. Mr. Jeffery. Yes, from three to ten days, he said. The Chairman. That five hours covers the whole thing ? Mr. Bartlett. You do not mean including repairs? You mean inspection ? Mr. Jeffery. I do not mean repairing the boiler. Repairs may take two months. Mr. Faulkner. How long does it take to prepare a boiler for inspection ? The Chairman. Never mind. Senator; we will take care of this. We do not permit this outside talk in this committee. Mr. Jeffery. That is about all I have to say, Mr. Chairman, unless there are some questions to be asked. Mr. TowNSEND. I want to ask you some questions on that. Sup- posing you have to take off a crown sheet; can you do that and inspect the boiler in five hours ? Mr. Jefery. The crown sheet? That is making repairs. Mr. TowNSEND. Supposing you have to take off any of the parts ? I am not, perhaps, familiar enough with this. Suppose you have to take off something from the engine to make such an inspection as you think proper ? Mr. Jeffery. May I offer a little explanation as to what a man does in making an inspection, so that it will be clear ? A man can go inside of the fire box and test stay bolts with the hammer test and examine the fire box, which would only require an hour or an hour and a half, or possibly two hours. Then he can go to the front end of the boiler, open up the front end — and he can open up the front end in five minutes unless it is a very complicated one — and then examine that, and then after that it is a case of entering the boiler and making what they term the internal inspection. He will have to take off the dome cap. That will be taken off by the machinist. The construction of the boiler may be such that it will be necessary to remove the standpipe, and that will be removed by the machinist. But if a boiler has a big enough dome, the man that is inspecting the boiler will go down inside of it, and then he is on top of the flues, and he can examine the fire box and all parts of it. That would be what you might call a periodical inspection. Now, take that inspec- tion where the flues are removed; of course, it takes some time to remove the flues. Mr. TowNSEND. How long ? Mr. Jeffery. That will depend on how man}- there are and their size and the method of examination. If you make them pull them out through a 2-inch hole, it may take you a week. If you take them out of the drive-pipe hole, you can take them out in an hour. The Chairman. That would not be in five hours. Mr. Jeffery. Removing the flues is not inspection. BOILEE INSPECTION. 1411 The Chairman. Mr. Townsend asked you about the inspection. You said a complete inspection could be made in five hours. Mr. Jeffery. I say a complete inspection; complete inside, out- side, upside down, and all around; every way you can think of. The Chairman. Then you undertook to describe that inspection, and then you went off into repairs. Mr. Jeffery. I was going to describe the periodical inspection, and then I was going to describe the complete inspection when the flues were removed. Mr. Richardson. Then you do not consider the preparation as any part of the inspection ? Mr. Jeffery. No, sir. Mr. Richardson. You have got to go through that, but you do not call that any part of the time necessary to make the examination ? Mr. Jeffery. No, sir; that is not a part of the time. Mr. Richardson. Do you not know it is a custom among the rail- roads that a thorough, complete examination is made of every boiler, according to the age, after it runs a certain length of time; and whether they discover any defect, they make that examination by taking it all to pieces and examining it? [After a pause, during which the witness was laughing.] Well, you may laugh, but we do not understand. Mr. Jeffery. I assure you I am not laughing at your remarks, but at the idea of taking a boiler all to pieces. Mr. Richardson. I asked you if they did or not. Mr. Jeffery. No, sir; they do not. Mr. Townsend. You spoke about five hours for a complete inspec- tion. I am interested in that. I will just ask this question of you: You said it would take five hours. Do you mean that within five hours' time you could discover any defect in an engine boiler 1 Mr. Jeffery. Every possible defect that could be discovered; yes, sir. Mr. Townsend. In a locomotive boiler? Mr. Jeffery. Yes, sir. The Chairman. When you speak of five hours, do you mfean after the engine is prepared for inspection, or five hours from the time it comes into the shop ? Mr. Jeffery. Mr. Chairman, if it came into the shop with steam up, as they frequently do, of course we would have to blow the steam off. We could not take that as a part of the time of inspection. The Chairman. How long would that take ? Mr. Jeffery. That will depend upon the pressure, but say you could blow off the steam in a half hour, that boiler would then be so hot that no man could go inside of it. The Chairman. How long will it take to cool ? Mr. Jeffery. If you let it cool off of its own accord, possibly a day ; but they will turn around and fill it up with cold water, and subject the boiler to all kinds of stresses. The Chairman. If you fill it with cold water, how long will it take ? Mr. Jeffery. Two hours, possibly. The Chairman. Then can they inspect it within five hours from that time ? Mr. Jeffery. Yes. 1412 , BOILEE INSPECTION. The Chairman. So that they will know at the end of seven hours from the time it comes in whether it is ready to go out or not ? Mr. Jeffery. Yes ; they can. The Chairman. And that will give it the most thorough inspec- tion known ? Mr. Jeffery. Yes ; that would give it a good, thorough inspection for a boiler in service. When an engine goes in the back shop for repairs they pull the flues,, anyway. Mr. Richardson. Then after the inspection is made they are prepared to give a guaranty that it will run safely, without explosion. Mr. Jeffery. I think after that is done everything is done that can be reasonably expected to be done. Mr. Richardson. And that guaranty can be given ? Mr. Jeffery. Yes, sir; I think so. Mr. Richardson. A guarantee can be given ? Mr. Jeffery. So far as any man can do it. STATEMENT OF MR. H. E. WILIS, OF CLEVELAND, OHIO. Mr. Wills. I am assistant grand chief engineer. Brotherhood of Locomotive Engineers. I would like, Mr. Chairman, to say just a few words with reference to the time it takes to thoroughly inspect a locomotive boiler. If an engine comes in hot, it will take perhaps from two to five hours for that engine to be cooled off so tnat she will be in condition for the men to work on her. Possibly it would take from three to five hours to take the dome cap off, possibly an hour or two to take the standpipe out, if necessary. If the engine comes in hot, it will take from six to eight hours to get the engine ready to inspect her boiler, and after that is done the inspection can be made in a matter of about five hours. The Chairman. Does that include the hydrostatic test ? Mr. Wills. No, sir. The Chairman. That is one method of inspection, is it not ? Mr. Wills. That is one method; yes, sir. The Chairman. Does that require a longer time ? Mr. Wills. No, sir. When the engine has the dome cap on and the boiler is in perfect condition and cool, they can apply the hydro- static test in a matter of possibly an hour or two hours, and make it quite thorough. They can do that without taking the jacket off. By watching closely they can see if the water seeps through anywhere, and they can locate where that comes, and then they have to take the jacket off to find the exact spot and repair it. It takes a matter of two to three hours to make the test. The Chairman. Is this inspection that the railroad companies do make — I do not remember now whether it is called the annual inspec- tion or not, but it is made at certain stated periods about a year apart — made within the time you have mentioned? Mr. Wills. They can make it within that time if the boiler is so constructed that it can be inspected internally. Some of the boilers are so made that they can not be inspected. The Chairman. Take those boilers that are so made that they can be inspected internally; how long do the railroad companies now take to make that inspection, the most complete inspection ? Mr. Wills. I am unable to say. BOILER INSPECTION. 1413 The Chairman. You ought to be able to state that fact. Mr. Wills. We are complaining because they do not make the inspections as we see it and know it and understand it. The inspec- tions ate not made. The Chairman. But you ought to know how long it takes them to make the inspections that they do make. Certainly your men make them, and you ought to be able to inform the committee as to that, as a matter of fact. Mr. Wills. I say it can be done as I stated to you. The Chairman. That is a matter of opinion. How long does it actually take now? Mr. Wills. I never inspected one in my life; I never have seen it practiced where they made these thorough inspections. The Chairman. All right. Mr. Wills. I wish to refer to some statements that were submitted by the superintendent of motive power and machinery of the Norfolk and Western Railroad in regard to inspections on that road, and I would hke to have the same appear in the record of this hearing. This is taken from series No. 8 of hearings held before the Senate sub- committee, and they submitted some of their reports of inspections as practiced on the Norfolk and Western Railroad, as evidence that they do make these inspections. On the reverse side is the report of the repairs, and it shows the very thing we complain of, that even where the inspections are made the repairs are not made, and their own reports, as submitted there, showed it, and I wish to have the same thing published in the record here so that the gentlemen inter- ested can see what they are in reality doing on the Norfolk and Western road, as shown by these extracts taken from their own records. The Chairman. You ask us to republish this matter that has already appeared in that Senate hearing ? Mr. Wills. Yes. The Chairman. Very well; the stenographer will insert it. Mr. Wills. It is about three pages, pages 38, 39, and 40 of the Senate report. We consider it very pertinent, as it is taken from their own records which they submitted. Mr. RtCHARDSON. Do those three pages show all that was said on the subject ? Mr. Wills. No, sir. Mr. Richardson. Why do you want to take only an extract from it ? Mr. Wills. This is a simple proposition that is connected together in full on that particular occurrence. They submitted statements to show that they were making inspections, and when these reports were turned over, on the other side, where the report of the work done was recorded, we found that the engines were run day after day by their own reports before those repairs were made. (The extract referred to will be found appended to this hearing.) Mr. Richardson. But why do you not put all that in ? Mr. Wills. The point is that they did not make the repairs that even their own inspections showed ought to have been made, and we claim that is a condition that exists in localities where they even make the inspections; and on many of the roads we say that they do not make any systematic inspections, but they make inspections on certain roads when something occurs that forces them to make 1414 BOILER INSPECTIOlir. inspections — the boiler gives out or the engineer in charge reports some defect. They then, in repairing that defect, discover other de- fects. While we know they have printed reports made that go to show that they do these things thoroughly, we deny that they are being done. We say that it is a farce ; and they are not being done on many of the roads. We will not deny that they are being reasonably well done on some of the roads. We will admit that on certain roads they are making these inspections and repairs so far as they can with convenience to their traffic only; but that freight and passengers must be moved first and repairs to their boilers are made afterwards, provided the engine is in condition to be taken out of the house and hitched onto the train. The Chairman. Has there been any improvement in the character of the inspection ■ made by the railroad companies since these bills have been pending ? Mr. Wells. There certainly have been great improvements on very many of our roads. The improvement is perceptible by the men who handle these engines. The International Biennial Convention of the Brotherhood of Loconiotive Engineers met in Detroit the 11th of this month. This matter was laid before that body, composed of about 750 delegates, and the general consensus of opinion there is, as expressed by our men, especially to me, that there nave been great improvements made on a large per cent of our railroads in the United States in reference to inspecting and repairing our boilers, within the past four months. I wish, Mr. Chairman, to call attention to another article that I would like to have republished, and I will call the stenographer's attention to it, with your permission. The Chairman. You mean another extract from the Senate hearings ? Mr. Wills. Yes. It will be a matter of about four pages. It is a statement made by the grand chief engineer of the Brotherhood of Locomotive Engineers in regard to this question, and I think it would be no doubt read with interest by the gentlemen here. The Chairman. Hand it to the stenographer. (The extract referred to will be found appended to this hearing.) Mr. Faulkner. Does that include all that is submitted ? Mr. Wills. I want it included. Mr. Faulkner. The whole of it? Mr. Wills. The whole of Mr. Stone's statement; yes, sir. It starts on page 51 in the Senate committee record. Mr. Townsend. What do you want now ? Mr. Wills. There is in the hands of each member of this com- mittee a bill that has been drafted after hearing the statements of those who were opposed to some of the former bills. The bill that is drafted now we believe can be adopted into law, and it will cost the Government about $350,000 to $400,000 to put it into opera- tion, and we believe that many of the desired results could be obtained in that way. It asks the railroad companies to do practically noth- ing but what many of them claim they are doing now, only that the reports shall be filed with a government official designated to receive those reports. The bill further provides that a work report shall be filed shortly after the regular monthly report, to show that the- work has been done. It provides for an inspector who may go at BOILEE INSPECTION. 1415 any time and verify this work report, and also verify the inspection ^t^°^\' v° ®®® ^^ ^* ^® ^^^^^ ^°^^- "^^^ ^i'l provides that the reports should be made by the proper railway officials, under penalty and under oath. Mr. Neale. Is this the second bill that is pending ? Mr. Wills. No. A copy of this, in typewriting, has been sub- mitted to the members of this committee. It has not been intro- duced, but it IS very much modified, and we believe will meet with but httle, if any, opposition from the gentlemen representing the railroad companies. Mr. Neale. Can we have a copy of that ? Mr. Wills. We will be glad to have you have a copy of it. The Chairman. That is the last proposition you have ? Mr. Wills. Yes; it has been submitted in typewriting only. The Chaikman. You have had several bills introduced ? Mr. Wills. Yes. The Chairman. The last bill introduced, I think, was the one introduced March 1, by Mr. Townsend. Mr. Wills. Yes, sir. The Chairman. Now, you have submitted a modification of that bill? Mr. Wills. Yes. The Chairman. You may hand that to the stenographer and have it printed in the record. (The typewritten draft referred to, later introduced by Mr. Town- send as H. E. 25924, will be found appended to this hearing.) Mr. Faxilkner. We have never seen that, Mr. Chairman. Mr. Wills. I would be glad if that could be printed in the record. That has been agreed upon by those who are asking for feder-al inspection. Mr. Richardson. You intend it as a compromise bill ? Mr. Wills. Yes. Mr. Richardson. And you object to this bill which is under con- sideration because it is excessive in its provisions ? Mr. Wills. This bill was introduced by our suggestion, but after hearing the evidence from the railroad companies and reahzing that it might cost them something more than it does now, we who are look- ing for federal inspection of locomotive boilers, or federal control of locomotive boilers, have agreed amongst ourselves to accept this, which is just what they claim they are giving us now on many of our roads. Mr. Richardson. I understand that in your compromise bill you Krovide to pay the inspectors an average salary of $1,800, and you ave 100 of them? Mr. Wills. Yes. Mr. Richardson. And you have, additional chief inspectors,' or inspectors-general ? Mr. Wills. Yes. Mr. Richardson. And you pay their expenses ? Mr. Wills. Yes. The Chairman. I want to get this straight, if I can. Mr. Wills. Yes, sir. The Chairman. The Townsend bill, introduced March 1, 1 suppose, was introduced at your request ? 1416 BOILER INSPECTIOlir. Mr. Wills. Yes, sir. The Chairman. That was introduced after the railroad companies had been heard on this subject before this committee? Mr. Wills. Yes. The Chaieman. And since then you have made this further modification ? Mr. Wills. Yes; after hearing some statements made before the Senate subcommittee of the Committee on Interstate Commerce. The Chairman. I just wanted the record straight. Mr. Wills. Yes. The Chairman. Is that all ? Mr. Wills. I believe that is all unless there are some questions. Mr. Calder. Do any of the States require inspection of locomotive boilers ? Mr. Wills. Yes, sir. Mr. Calder. What States ? Mr. Wills. New York State has a law, but to be honest with you, I can not describe it any better than to say that we look upon it as a kind of a farce; and I believe some other States have laws. Excuse me. I do not intend any disrespect to any State. Mr. Calder. Do you know whether any boilers have been inspected in that State under that law ? Mr. Wills. I am not familiar with it. Mr. Calder. Do you know whether they have or have not? Mr. Wills. I understand that the men who are there claim that the law is of no value at all. It simply provides that the company shall file a statement of what they are doing. Mr. Chairman, I would like to ask Mr. Martin to make a statement. The Chairman. I do not want to be disrespectful to Mr. Martin, but we can hear him at any time. Mr. Martin. That is all right. The Chairman. Have you any one else here to be heard ? Mr. Wills. Yes; no one from out of town. We expected General Uhler here this morning. He told ihe he would come, but for some reason, I know not why, he is not here. The Chairman. Of course I do not care whom we may hear. W^ have ten or fifteen minutes more this morning. Will you finish this morning ? Mr. Wills i I think we can. There are two gentlemen to come after Mr. Martin, but I do not think they will care to take more than five minutes each. The Chairman. Very well. STATEMENT OF HON. JOHN A. MARTIN, A REPEESENTATIVE IN CONGRESS FROM THE STATE OF COIORADO. Mr. Martin. I will be very brief. Mr. Chairman. I do not care to appear at all, except at the request of these gentlemen, although I introduced one of the bills that is now pending before this committee, and my knowledge of this matter is not altogether confined to the sponsorship of that bill, which is a very shght modification of the bill introduced in the Senate by Senator Burkett. My interest is very largely due to the fact that I am or was a railroad man myself. I came of a railroad family. My father was one before me. I saw BOILEB INSPECTION. 1417 four years' actual service as a locomotive fireman, besides other branches of railway work, and I have two brothers now who are locomotive engineers, and I illustrate the truth of the old adage, "that birds of a feather flock together; " I suppose I feel more at home with a bunch of railroad men than I do with a bunch of Congressmen. I was present at the former hearings before the committee, and hs- tened with a great deal of interest to the presentation of the side of the railroad companies made by their very able representatives. I wish to say now that I do not intend to bind gentlemen or their views by what I may have to say, but my principal objection, based upon my experience and observation, considering the object of this proposed legislation, is that it was very largely confined to the ques- tion of construction of locomotives. Now I believe that locomotives generally are about as well constructed as they can be, considering the class of service to which they are subjected, which is unquestion- ably the most severe class of service imposed upon any mechanism that has ever been invented by man. It is absolutely necessary that locomotive boilers should be durably and strongly and well con- structed, but I think that this legislation goes not so much to the question of new construction as it does to old work; not new engines, but old engines that ought to be in the scrap heap or in the back shop for repairs. It is more largely a matter of inspection and repair, rather than construction. It is a well-known fact among all railroad men that practically all railroads suffer with a chronic shortage of motive power. They are always up against it for engines. I can recall to your minds in this connection the testimony of a very able gentleman who addressed this committee at length in reference to the Chicago, Milwaukee and St. Paul Railway, and I recall to your recollection the fact that it was brought out then, I think by Mr. Townsend, of Michigan, that notwithstanding the fact that there had been on the federal statute books for more than a year a law requiring the railways of the country to equip their locomotives with automatic ash pans, ash pans that can be dumped or emptied auto- matically, at that time perhaps not more than one-half of the loco- motives on that railway had been so equipped. Now, the equipment of locomotives with automatic ash pans is a very simple matter, and I would like to ask what condition do you suppose you would have found among the locomotive boilers on that road ? The excuse of the ofllcials was that they had been " up against it " for power; their power had been so hardly driven that they had not had time to equip their locomotives with the ash pans required by the federal statute. Neither, it would develop upon investigation, had they had time to inspect and repair their boilers. If they were requu-ed to run then- engines without equipping them with the ash pans which were required by law, I think it very likely that they were running their boilers without the inspection and repair which is not It is seventeen years ago now, as I remember, that the Santa Fe RaUway Company equipped its locomotives with self-dumpmg ash pans They equipped the engines with what we call the ash-pan blower, so that the fireman by simply turnmg the boiler on the blow- head could blow the ashes out of the pan. That was something that the locomotive firemen on the Santa Fe did; they brought about that great convenience to the firemen on the Santa Fe Railway system; 1418 BOILEB INSPECTION. yet what a handful of firemen was able by voluntary agreement with the Santa Fe Railroad to accomplish seventeen years ago, national legislation on the subject has not been able to compel the Chicago, Milwaukee and St. Paul Railway to do up to date. The Chairman. I do not see what that has to do with the question we have before us, which is the inspection of boilers. We are called upon here to listen to talk — not information, but opinions — about things that we have already made into law. I do not think the com- mittee ought to be compelled to listen to this. Mr. Maktin. If the chairman will pardon me, it just has this to do with it, that these things can be done, and done easily; but while, as Mr. Wills has well said, some companies will do them voluntarily, it takes the law, and then something, to get other companies to do some things. The Chairman. We do not require information on that subject, because everybody knows that. Mr. Martin. Another objection, in my mind, to the statements made by these gentlemen was that this went too much into questions of detail; too much into the question of water glasses, and the S[uestion of fusible plugs, and things of that kind. What I would eel like contending for in this matter is the principle of the thing. If you could establish the principle of federal inspection of these locomotive boilers and leave the question of practical detail largely to some bureau, the Department of Commerce and Labor or the Interstate Commerce Commission or whatever bureau or com- mission of the Government may have charge of this matter, I think you could leave largely with them the question of the detail of the law. So that what I think the railway employees of the country ought to be interested in mostly, and what I think they are interested in, is rather the principle involved in this bill. But even in the matter of principle, I want to call your attention to the fact, and I thiak it is important, that there is nothing new in this measure. Federal inspection now applies practically to every part of railway equipment except the locomotive. Several years ago Congress passed laws requiring the equipment of locomotives with driver brakes, the equipment of a train with air brakes, providing for their inspection, and requiring automatic couplers and the inspection of them, and only during this Congress we have passed a bill requiring and regulating the equipment of trains of cars with running boards, grab-irons, and handholds, and all that sort of thing, and providing for their inspec- tion, so that as a matter of fact to-day the law provides for practically every feature of the equipment used by common carriers m moving interstate commerce with the exception of the boiler, and it would simply be extending the principle that has already been recognized and established by Congress in these bills to locomotive boilers. I think it is obvious to everybody why it is necessary to have fed- eral inspection of locomotive boilers, and why state inspection would not be sufficient. I do not believe the railroad companies themselves want state inspection, even if state inspection of the instrumentalities of interstate commerce would be permissible; and even if it were, it would not be practicable, because now a locomotive may be over here at the Union Station at Washington, and an hour from now it may be in Baltimore, and in two hours more in Philadelphia, and in two hours more at Jersey City, N. J., so that it would be just as imprac- BOILEK INSPECTION. 1419 ticable and unsatisfactory to have state inspection of locomotive boil- ers as it would be to have state inspection in all these other equipments of engines and cars which are now subjected to federal supervision and inspection, by reason of the nature of the service and the fact that they are moved from place to place. The bill that I introduced calls for a quarterly inspection of boilers. I do not believe, and the other gentlemen now, I think, do not believe, that a quarterly inspection is necessary. They believe that such an inspection would be cumbersome and burdensome and to a large extent unnecessary. The main thing in my judgment was touched upon by Mr. Wills a few moments ago in answer to a question of the chairman. The main thing is to have somewhere a power of inspec- tion existing that may be called into requisition and used at any tune. It has been stated to you that since the introduction of these bills there has been a marked improvement in the inspection and repair of locomotive boilers. It will not always be necessary for an inspector to personally inspect every boiler that may run out of a division point. The men know about these things. I can state to you from my own experience that many of these locomotives that are out of repair are well known to be in bad condition. A locomotive engineer can write a letter to a government inspector and bring him to the division point and have him inspect the locomotive. Mr. Richardson. Right there, do you think that the employees of a railroad company would write to the government agency ? Mr. Martin. Yes; I think so; when a locomotive became known to be in bad repair. There would not be near so much of it under federal inspection as there is now, but when instances of that kind did occur, I have no doubt but what the men whose lives were endan- gered by that condition, if the company did not take that engine out of service and repair it, would very quickly notify the federal inspector to come to that point and inspect the engine. Mr. Sims. Would not the man who did that be likely to lose his job? Mr. Martin. No, sir; he would not. The railway men of the country are fairly well able to protect themselves in these particulars, and I do not think they have any apprehension on that score, or would charge that the railway companies would discharge their men. Mr. Wills. We do charge it; that they do do it. Mr. Sims. I was going to say that the gentleman a moment ago gave an instance of that sort. Mr. Martin. I referred to notifying them under the federal law; but I will take the gentleman's statement on this proposition. The Chairman. The time is up. Mr. Martin. Just another word, Mr. Chau-man. I have fared locomotives that had teats hanging like glove fingers from the crown sheet. I have fired locomotives when I was afraid to open the iu-e- box door to put in a shovel full of coal for fear she would blow down on me. W^e took chances and the railroad companies took chances, and they are human, and we are only human. But what we want now is a law that will limit this chance takmg to a certam extent; and the very fact that you have such a law on the statute books, in my judgment, will remedy the present conditions to such an extent that there will not be a fraction of the federal inspection and 23738— PT 26—10 4 1420 BOILEE INSPECTION. expense entailed that might be made to appear by some of the statements that have been put before the committee. The Chairman. You behev8 in leaving the details to the railroads ? Mr. Martin. I believe in leaving the details of such a law very largely to the bureau or the department having jurisdiction of this matter. That is, they can work out the details of inspection, of what appliances ought to be used, and regulations for mating inspection, and so on, and so forth. The Chairman. Is there anyone here to be heard in behalf of the full-crew bill ? Mr. Roe. Not to-day, Mr. Chairman, that I know of. May we have a little further time to-morrow or some other day? General Uhler desires to be heard and two other gentlemen want to be heard briefly. The Chairman. We have other bills on which gentlemen desire to be heard to-morrow, but we will hear you briefly to-morrow. (At 11.45 o'clock a. m. the committee adjourned until to-morrow, Tuesday, May 17, 1910, at 10.15 o'clock a. m.) [Extract from pages 136, 137, and 138 of hearing before subcommittee of Senate Committee on Interstate Conunerce on March 3, 1910.] Senator Buekett. Mr. Chairman, I understand that the committee has decided they can not print this piece of evidence that was offered by the representative of the Norfolk and Western Railroad. It is the official report of the inspector for stay bolts. I think, perhaps, the committee is right in that decision, but I would like, just now, in the presence of the committee, to call attention to some things which this shows, which are vital to it, so that it may be in the record, and may be put in in the presence of the committee., I want to read what this is. This is instructions to the inspector [reads]: ' ' Each boiler is to have its stay bolts inspected every time it is blown put for washing which is to occur approximately every ten days. In making the inspection the inspector is to take a copy of this sheet (taking care to get the sheet representing the boiler he is inspecting) into the boiler with him. Ashe inspects each stay bolt and finds a broken one he is to make a cross mark on the circle in the diagram representing that stay. After completing the inspection he is to sign and date this report and turn it in to the proper parties. "The foreman of the boiler makers is to order work done in accordance with the report herewith, and after the work is done is to sign his name and date in the proper place. "Reports on this form are to be made only when broken stay bolts are found, whether they are renewed or not. If the stay bolts are found broken and not renewed, the fact should be so stated by entering 'Not renewed' in the place of the name for the boiler maker. "In making reports of boilers inspected where n6 broken stay bolts are found, use Form M. P. 96. "The foreman in charge is to inspect and see that the work is properly done and that the signature and date is in the proper place, and is then to arrange to take care of these reports on suitable file, preserving same so they may be used as evidence in court, if required. He is to make out two copies of the same, one of which is to be forwarded to the superintendent motive power and one to the master mechanic of the division on which the work is done. "W. H. Lewis, "Superintendent Motive Power. "Roanoke, Va., April 1, 1905." I have read that to show what this is. Now, one of the contentions is that while they were investigated, the work is not done; the engines go out without the work being done. Senator Kean. It so states on there? Senator Burkett. Certainly. This is the report of engine 961— all of these sheets [indicating]. Now, I want to call attention to what these sheets show, for the reason that it will then be in the record. BOILER INSPECTION. 1421 The first one shows here, 9/30/5, engine 961 was inspected and there were found 25 broken bolts. In two places there were a cluster of 3 bolts broken. On the reverse side it says "Not renewed, under the instructions," showing the engine went out. The next is 10/20/5. The same engine was inspected and there were found 28 stay bolts broken. On the reverse side, to be signed by the boiler maker, it says "Not renewed." The next sheet shows an insjjection, 10/24/5. They found 39 broken stay bolts; in one cluster, 7. That at that time was renewed. Then there are several other inspections which I do not care to call attention to as I go along. On the 13th day of May, 1907, this same engine was inspected; 8 stay bolts found broken. It says on the other side that they were not renewed. The next sheet shows 20 stay bolts broken, one cluster of 4 that was renewed. Now, on the 22d of June, 1907, this engine 961 was inspected. There were 4 stay bolts found; among those were No. 27 in row D and Nos. 26 and 27 in row C, of the right side and crown sheet. The next report was — I should say on the reverse of that former sheet it is said "Not removed." The engine was then inspected on the 20th of August, 1907, when there were 4 stay bolts found broken, but not the 4 that had been found broken before, and this plate does not show that these stay bolts in rows C and D on the right side were broken, but shows them to be perfect, but finds 4 other and different ones. On the reverse side of that it says "Not renewed." The next inspection of this engine seems to have been on the 29th day of August, 1907, when there were 4 stay bolts found broken, the same 4 as were found in the last report. This report shows that they were not renewed. On the 7th day of Sep- tember, 1907, the same engine was inspected again and only 2 stay bolts were found broken, and neither of these 2 correspond with any of the stay bolts found broken in the previous examinations, and the boiler maker certifies that they were not removed. On the 17th of September the engine was examined again, the next report is, and there were 5 stay bolts found broken, 4 of which correspond with two other examina- tions, being the second and third back. The report of the boiler maker is that they were not removed. On the 19th of October, 1907, the same engine was inspected and there were 5 stay bolts found broken, 4 of which correspond as before. The report is "Not renewed " by the boiler inspector. Senator Kean. How rnany stay bolts are there in that boiler? Senator Buhkett. Twelve or fourteen hundred, the testimony is here. Mr. Faulkner. One thousand four hundred and sixty-four. Senator Buekett. The 7th of October, 1907, the same engine shows 3 stay bolts broken and the boiler maker's certificate is "not removed." The examination certifi- cate for the 24th of January, 1908, shows 5 stay bolts broken, and the report is they were not removed. The 11th of February, 1908, shows 11 stay bolts broken, the report is "not removed." The 21st of February shows 10 stay bolts broken, and the report is "not removed." The 28th of December, 1908, shows 18 stay bolts broken, and the report shows they were not removed. The report for the 22d of January, 1909, shows 22 bolts broken, and the report shows they were replaced. The report for March 3, 1909 shows 13 stay bolts broken, and also shows they were not removed. The report shows stay bolts Nos. 10 in each of rows A, B, C, D in the throat sheet, right side, to be broken, "not removed." Report for 19th of August, 1909, shows that 27 stay bolts were broken, and shows that they were not removed. Of these 27, Nos. 10 in toe rows A B, C, D of the throat sheet, right side, were broken. The next report tor the 16th of October, 1909, showed 67 plates broken, among which were Nos. 10 in rows A, B, 0, D, E on the throat sheet for the right side of the engine. The report shows ^T/Wnls^ Ui. Chairman, General Uhlet is here, and we would like, if possible, to ^' Senator^OuMmNs!" I am very sorry, but the Senate meets at 11.30 this morning, and I must be there. Do you desire to be heard orally, or will you file a statement? Mr Faulkner. No; he desires to be heard orally. . ,., , Senator Cummins. Very well. We will close this hearing until to-morrow morning ^ (Accordingly at 11 o'clock and 30 minutes the subcommittee adjourned.) 1422 BOILEE INSPECTION. [Extract from pp. 149 to 153 of Hearing before Subcommittee oJ the Senate Committee on Interstate Com- merce of March 3, 4, and 5, 1910.] STATEMENT OF WARREN S. STONE. The Chairman. Your reeidence is Cleveland? Mr. Stone. Cleveland, Ohio. I am grand chief of the Brotherhood of Locomotive Engineers. The Chairman. Mr. Stone, you know the bill we have under consideration? Mr. Stone. Yes, sir. The Chairman. You may state what your views are about it. Mr. St6ne. I am familiar with the bill, and to set at rest any question regarding the bill, I want to state, as the chief executive of the organization representing 65,000 members, 58,000 of those in the United States, that the bill has the entire indorsement of the Brotherhood of Locomotive Engineers. They want the bill ; and they are asking you gentlemen to give us this bill for our protection. We believe it is necessary. We believe we should have added protection of government inspection for the locomotives the members of this organization operate. It is impossible for us to bring to you much of the evidence that is in existence because of the quiet coercion which stands back of our men who operate these boilers. There are many facts known to all of us who have been in active service, and most of us speak from experience. I have had twenty-five years in a cab of a locomotive myself, but when you come to get afiSdavits or written testimony, they decline to give it, because of the quiet coercion that stands back of the whole thing; that he is a marked man, and he does not want to go on record. The bill, however, meets with the approval of our membership, regardless of any statement to the contrary. Senator Kean. The membership of the organization have never seen this bill. Mr. Stone. I understand. The purport of the bill is the same. It provides for a government inspection of the boiler. That is what we are trying to get at; the details we are willing to leave to the committee to work out, but we want an inspection in words and not an inspection on paper, which is the case of the majority of our railroads to-day. Reports are coming in to me almost daily and which I can not furnish for the reason that they say, "Do not use my name and get me into trouble." They say, "What are you doing down to Washington? " Our people have wakened up. We are having an inspection of our boilers; something we have never' had before. Front ends are being opened to see if they are all right. Brick arches are knocked out of fire boxes and tested; something we have never had before. 'What is the trouble?' I know of one road that has even gone to the extreme of knocking out a brick arch at every trip. Something absolutely unnecessary. Inspecting flues and testing stay bolts once a week instead of once in thirty days, as they used to. They have gone to the other extreme. They say to us, and the plea is made that there will be great delajr of traffic caused by this added government inspection. If they are giving the inspection they claim to give to-day, and which, in the majority of cases we know they do not, there would not be any more delay to traffic under government inspection than there would be under the inspection they give at the present time. The claim is made that the engineer should be responsible. The engineer is placed in a peculiar position. He works under a large direction — if you will excuse the expression, it is not used in a spirit of sarcasm — petty officials who are anxious to make a record for themselves and who insist on keeping the operating expense down to the lowest cost because they are pitted against men on other divisions m the same class of condition, and if John Jones under certain conditions can operate his division at a less cost per mile than Bill Smith can on the other division they at once want to know why., A few years ago — things go by fads in railroads the same as everything else — every- thing was open stay bolts. Open stay bolts or hollow stay bolts were a good thing, and when they cracked they spurted out. They always told you about it. Well, you come in and report "broken stay bolts." If they were in a hurry for the engine, the stay bolt was not replaced at all. The boiler maker went around and drove a plug into it, so it would not spurt any more . Engines are run to-day, not only on one railroad, but on many of them, with stay bolts leaking under the jacket. Our men are standing up in this cold, wet, winter weather drenched with water from the steam in the cab of the engine and the claim is made that they can not afford to take the engine out of service to make the repairs. Half has not been told in regard to broken stay bolts. It is nothing unusual to find 30 or 35 or 40 broken stay bolts at the end of thirty days on an inspection. I don't think any superintendent of motive power will correct me. I have seen 78 in one fire box myself at the end of thirty days. I think they will all agree, any of the locomotive-boiler constructors, or the men in charge of that depart- ment, will agree that the locomotive boiler has more and harder and different strains BOILEE INSPECTION. 1423 upon it than perhaps any other type of boiler, owing to its peculiar construction. We will all agree that any man can tell when a boiler has collapsed from low water, but we have case after case where they say the engineer had low water, and he is discharged for it, and yet that company will refuse us the privilege of bringing in an outside boiler maker, who is an expert, to examine the boiler; will deny us that privilege. They simply say: "We have passed on it and that settles it. You can not bring in an outsider here to meddle with our business." We have cases every year that we are denied the right, and in one case I put an expert boiler maker into a boiler in the night. Stole him like a thief in the night to examine the boiler, and the superintendent of motive power told me the next day: ' ' I wish I had caught him. I would have had him in prison for it." And they put a guard on the boiler to see that we put no more in. This is something not only of importance to the members of the organization 1 repre- sent but it concerns you gentlemen who ride on a railroad train. Do not lose sight of the man who is plugging along on a slow train who may blow up in front or behind of a passenger train on a double track. The danger is always present, not only in the engine pulling the train, but in any engine you may meet or pass, and I hope that you gentlemen, after you have listened to all the conflicting statements and testimony, will report favorably on this bill, which gives at all times an equal chance for the lives of the men we represent as compared with those in the operation of our marine service. That is all 1 care to say. Mr. Wills is here as the representative of the organization and has been in close touch with the bill all the way through. I have only kept in touch with it in a general way. He is our representative delegated by the organization to represent the interests of the order. The Chairman. Do you desire to ask anything of Mr. Stone? Mr. Paulknee. I would like to ask, Mr. Stone, what is your judgment in reference to the suggestion made by General Uhler that engineers ought to be required to pass through expert examinations and be licensed before they handle a locomotive engine? Mr. Stone. I am not in favor of an engineer being licensed. I am perfectly willing for an engineer to pass through any kind of an examination. In fact, there is no rail- road in the country that does not require an engineer to pass through an examination. Mr. Faulkner. Don't you think that the Government should take control of the instrument that controls that boiler by giving him a license, and through proper examination? Mr. Stone. This is the only objection to a government license — I know what you are getting at; you think perhaps that will be a boomerang on the bill, but I am per- fectly willing to go on record — ^here is the objection to the government license: If the Government operated all the railroads and employed the engineers, I would say "Amen" to it; but if the government license goes into effect, and through sorae mis- take — and the engineer is only human, he is not a machine, he may make a mistake, the best of men do — should he make a mistake and lose his license he is out of com- mission entirely, for all time to come. There is no chance for him to get back again. While under present conditions a man may have burned boilers on some of our best lines, and if they find he has had a previous good record he has been disciplined per- haps by discharge, or perhaps by sixty or ninety days' suspension, and has been returned to the service. That would be our objection to the government license; but so far as the examination of engineers is concerned, I do not think any government examination could be much more rigid than what we go through at the present time on examination. . ^. .. , Mr. Pattlkner. You don't think, then, the Government is operating the road, and by bills like this taking entire charge of operation? ,. ,, Mr. Stone. I think the Government is entirely within its right m safeguarding tbe "lilr Paotkner. Then, you don't think it is necessary, therefore, that he should be under a government license, just as well as the inspection of the boiler; that he should be inspected and have a license under such regulations as the board should prescribe as to his qualifications. t j 4. • • Mr Stone The mere fact that he carried a government license, I do not imagine, would insure the safer operation of the train. A man comes up to locomotive engineer through a long apprenticeship and classification, and I think that the American engineer will compare favorably with anything in the world, and a little more so, perhaps. Mr. Faulkner. He is a good man. . • 4.t, *v, Mr Stone. This is digressing for a minute. If there is anything m the theory of the survival of the fittest, it is the locomotive engineer Out of 100 men who start as firemen only 17 become engineers. Out of every 100 men who do become engineers, only 6 reach a passenger engine. , , , j i, • a o The Chairman. Is there anyone else here who desires to be heard briefly? 1424 BOILEE IlSrSPBOTION. Mr. Wills. We would like, Mr. Chairman, to have Mr. Jeffery take the stand for a moment. Senator Cummins. Is it in regard to these Norfolk and Western engines? Mr. Wills. It has been suggested that there be no reply to what has been said by the Norfolk and Western Railroad, and his remarks will be confined in a general way to the condition of boilers. The Chairman. We have heard Mr, Jeffery once on this question. We must close this hearing this morning, but we will hear Mr. Jeffery until half past 11. Washington, D. C, March t8, 1910. Mr. H. S. Z'EWE^Y, Washington, D. C. Dear Sib: Agreeable to your request for a statement on my part as to what I know about the past and present condition of locomotive boilers, together with a brief statement about myself, would state that I am a practical boiler maker of ten years' experience in the construction and repairing of steam boilers, and have worked for the following railroads: Seaboard Air Line Railroad, Baltimore and Ohio Railroad, Norfolk and Western Railroad, Southern Railway, and the Louisville and Nashville Railroad. I am at present employed by the Southern Railway and I am stationed at Birming- ham, Ala., and have been in their employ for the past fourteen months; also worked for them several years ago for a period of thirteen months. I know in a general way what practically every boiler maker knows and that is: Boilers are frequently in service when in an unfit condition, and it is the practice throughout the country, at least with the railroads that I have worked for, to plug the tell-tale holes of stay bolts when steam and water from within the boiler finds an outlet by means of them. When I was in the employ of the Baltimore and Ohio Railroad, which was in 1904, they furnished special plugs and tools for the purpose, and I have, in accordance with orders issued by the foremen, plugged holes to the extent of 30 in a single locomotive boiler in a month, and plugged in practically every locomotive boiler in service on that division from 5 up. I was employed by the Louisville and Nashville Railroad in 1905, and was stationed at Birmingham, Ala., and while in their employ I saw a locomotive boiler with 72 broken stay bolts in one nest, and the sheet was bulged about 2 inches. I also saw a number of engines, or rather there were engines on that division, the boilers of which had from 30 to 100 broken stay bolts, and With nests of six to ten bolts, and the loco- motives were practically in constant service. They were taken out of service for only a short period, and only long enough to remove a portion of the broken stay bolts — only sufficient to save the sheet from deformation. Time and space do not permit stating at length or fully in regard to all that I have seen, but I do know that the "dope cure" is used extensively by railroads, and I further know that "fractured stay bolts" can not be found by the hammer test, and I have yet to see the man that can detect "fractured stay bolts" by the hammer test. Regarding boilers that are so constructed that an internal inspection is impossible, would state that thirty-seven and thirty-eight hundred class of the Southern Railway are so constructed, and the other railroads as given above have many locomotive boilers so constructed, but I am unable to recall their class number. When I was in the employ of the Seaboard Air Line Railroad I saw a locomotive boiler which had about 70 flues plugged with cast-iron plugs. In 1906 (I think that was in the time) I got into a little controversy at the Southern Railway shops, Birmingham, Ala., because of my remarks, etc., in regards to keeping in service a locomotive the boiler of which was not in good shape. This particular boiler had about 30 flues which had no bead, and the sheet had pulled away considerable; some of the flues were nearly out of the flue holes. In the early part of 1910 on engine 3862, Southern Railway, in accordance with instructions, I made repairs that were not proper. An upright brace from a crown bar to the dome was found broken — or rather the rivets securing the palm of the brace to the dome body were leaking, and when an examination was made as to the cause, the broken brace as mentioned was found. Instead of fixing the brace it was let go and the holes in the dome body were plugged, and the boiler is in that condition now. In the latter part of 1909 when working on engine 603 I plugged, in accordance with orders, a hole in the fire box tube sheet. A heel brace or called by some a "belly brace " was found leaking. I was assigned to replace the leaky bolt, but before I could com- plete the work as it should be, I was told the engine was needed, and in order to release the engine, the hole in the flue sheet was plugged; as far as I know the boiler is in service now minus one heel brace. Yours, very truly, 0. A. Clakk. BOILEE INSPECTION. 1425 Washington, D. C, March US, 1910. Mr. H. S. Jeffbry, Washington, D. C. Dear Sir; The purport of this letter is to state that I am a practical boiler maker and h0,ve had twelve years experience in the construction and repairing of boilers. I have worked for the Big Four Railroad,^ the Southern Pacific Railroad, the Illinois Central Railroad, the Missouri Pacific Railway, and the Southern Railway, and I am work- ing for them now at Columbia, S. C. I agree with you that "fractured stay bolts " can not be found by the hammer test; that ttie tell-tale holes are plugged, also the flues — in fact, when I was in the employ of the Big Four Railroad, I saw a locomotive the boiler of which had about 125 flues plugged. Regarding boilers in service with more or less broken stay bolts, would state that such practices were permitted; also boilers were in service when a great many of the flues had no bead. I have seen many boilers so constructed that an internal inspection ia impossible, and agree with you that the jacket, etc., are not removed (only in special cases) when the locomotive comes in the shop for general repairs. I also desire to state that I was in the employ of the Illinois Central Railroad and was assigned to put in a full set of radial bolts. I found that the bolts were so threaded that they would not tram, and when I reported same was told to stretch the bolts, or heat them and apply when hot. I refused to do either and after more or less talking on the subject, the matter was taken up with the master mechanic, but he appeared to be at sea as to whether to support me or the foreman, Mr. Tucker. In the mean- time the inspector-general put in his appearance, and he supported the writer. Since you are a practical boiler maker, it is needless for me to explain the unmechanical method of heating and applying radial bolts, braces, etc., hot. When I was in the employ of the Missouri Pacjfic Railway, Atchison, Kans., I was instructed to connect the boiler shell to the back end . I found that in the girth seam, or what is called the ' ' roundabout ' ' seam, that the number of holes did not agree, but the connection was made nevertheless . Of course, there were many partly ' ' blind holes, ' ' and many other holes that were totally blind, but neither Mr. Jaquary, the foreman boiler maker, or the master mechanic, Mr. Miller, would listen to any protest on the part of others and myself. Yours, very truly, F. C. Stoeckler. LIST OF BOILER EXPLOSIONS SUBMITTED BY MK. JEFFERY. Whereas Mr. Austin, of the Santa Fe Railroad, stated that I could not give a single instance of a boiler which "did blow up," I take the liberty to call attention to the following: 1. The crown sheet of a locomotive on the Salt Lake Railroad gave way, August 22, 1908, at Ontario, Cal. The engineer and fireman were slightly injured. 2. The boiler of a Delaware and Hudson locomotive exploded, August 22, 1908, at Oooperstown Junction, N. Y. One man was severely injured. 3. The boiler of a switching locomotive exploded, August 29, 1908, at Ann Arbor, Mich. One man seriously injured. 4. The boiler of a Denver and Rio Grande passenger locomotive exploded, Septem- ber 2 1908, near Thompson Springs, Utah,- 75 miles west of Grand Junction, Colo. Engineer George A. Lund was fatally injured, and the fireman, Harry Ridell, was injured very badly, though it was thought he had a small chance of recovery. 5 The boiler of a Seaboard Air Line locomotive exploded, September 5, 1908, in the yards at Raleigh, N. C. Fireman Hugh Murchison was fatally injured. 6 The boiler of a San Antonio and Aransas Pass locomotive exploded, September 7 1908 about 15 miles from Yoakum, Tex. Fireman Augustus Ryan and Head Brakeman Joseph May were injured and died later in the day. Engineer Z. W. Welch was also injured, but not fatally so. . ,, at v i tvt 7 A slight explosion occurred, September 19, 1908, on one of the New York, JNew Haven and Hartford Raihoad's freight locomotives at Meriden, Conn. Engineer F W Kenyon and Fireman Robert Green were thrown from the cab and severely burned and bruised. So far as we can judge from the data at hand, the explosion consisted in the failure of one of the tubes , , „ ^ , „_ .,„.„ ., c^,-^„^ 8 The boiler of a freight locomotive exploded September 27, 1908^ on the Chicago Milwaukee and St. Paul Railroad, near tortage, Wis Engineer Frederick J. Good was killed and Fireman Christopher Hanson and Brakeman B. N. Taylor were seriously injured. 1426 BOILER INSPECTION. 9. The boiler of a freight locomotive exploded, October 1, 1908, on the Trenton Cut-off Railroad at Fort Hill, near Flourtown, Pa. Engineer A. K. Miller -was injured so badly that he died soon afterwards. Fireman D. E. Parks and Brakeman W. T. Rowland were also injured seriously, but it was believed that both would recover. The property loss was estimated at $10,000. 10. The boiler of a Southern Railway freight locomotive exploded, October 13, 1908, at Mayo, on the Atlantic and Danville division, some 40 mile.s from Danville, Va. Engineer James Pharr was killed and Fireman Frederick Smith and a Charles E. Massie were slightly injured. 11. The boiler of a Denver and Rio Grande locomotive exploded, October 18, 1908, near Carlton, 8 miles north of Colorado Springe, Colo., as the result of a derailment. Leonard F. Banker, who was serving as fireman at the time, was killed. 12. The boiler of a Colorado Southern freight locomotive exploded, October 22, 1908, near Kinder, La. The engineer and fireman and one of the brakemen were more or less injured, and it was believed that the fireman could not recover. 13. The boiler of locomotive 1966, drawing a milk train on the New York Central, exploded, October 28, 1908, near White Plains, N. Y. Fireman George Sommerville and Br3,keman C. H. Traver were fatally injured, and Engineer C. J. Ranus was scalded, but will recover. 14. The boiler of a Lake Shore freight locomotive exploded October 28, 1908, near Elyria, Ohio. Engineer George P. Owen and Fireman J. C. Owen (his eon) were fatally injured, and one of the brakemen was injured slightly. The locomotive was a total wreck. 15. The boiler of a freight locomotive exploded November 21, 1908, at Ripley, N. Y. Fireman Tucker was killed and Engineer William Mayer and Brakeman Wagner were scalded. 16. The boiler of a Missouri, Kansas and Texas freight locomotive exploded Novem- ber 27, 1908, near Idenbro, 6 milee eouth of Parsons, Kane. Engineer F. E. Melville and Fu-eman F. F. Wolff were killed, and Brakeman C. E. Roe was fatally injured. 17. The boiler of a Chicago and Northwestern passenger locomotive exploded December 1, 1908, at Evanston, 111. Fireman J. H. Wall was scalded and the loco- motive was wrecked. 18. The boiler of an Ontario and Western freight locomotive exploded December 4, 1908, at Fair Oaks, 3 miles from Middletown, N. Y. Fireman William P. Kelly was injured seriously and perhaps fatally, and Engineer John Dougherty and Conductor George L. Knox were injured. The locomotive whose boiler exploded was almost completely demolished, and another locomotive, which was coupled to it, was thrown over an embankment and badly damaged. 19. The water leg of a New York Central locomotive ruptured November 5, 1908, near Ardsley, N. Y. Fireman Henry Wenn was seriously injured. 20. The boiler of a Lake Shore and Michigan Central passenger locomotive exploded November 9, 1908, at Chicago, 111. Fireman Thomas Daly, jr., was scalded so badly that he died later in the day. 21. The boiler of locomotive No. 833 on the Delaware and Hudson Railroad exploded November 13, 1908, at East Windsor, N. Y., on the Nineveh branch. Brakeman John Carter and Fireman E. T. Bradshaw were killed, and the engineer, Calvin E. Kimball, and Conductor George Breese were injured. 22. The boiler of a freight locomotive exploded November 16, 1908, on the St. Louis and San Francisco Railroad, near Hayti, Mo. Brakeman Frederick Bossier was instantly killed. Fireman H. C. Brock was injured so badly that he died a few hours later, and Conductor J. H. Hathaway was fatally injured. Engineer Samuel Frissell was badly injured, but at last accounts it was thought that he would recover. Sixteen loaded box cars were demolished. 23. The boiler of a Southern Pacific freight locomotive exploded December 12, 1908, at Beaumont, Riverside County, Cal. Engineer David McDonald, Fireman Roy Reynolds, and Conductor Guy Brockman were instantly killed, and Head Brake- man E. A. Williams was seriously injured. 24. The crown sheet of a locomotive collapsed December 8, 1908, at the Caswell Creek colliery of the Pocahontas Consolidated Collieries Company, Simmons, W. Va. Engineer William Vincent, Machinist John Russell, and Brakeman Robert Muse, who were on the locomotive at the time, were injured. f 25. The boiler of a freight locomotive exploded December 16, 1908, on the Chicago and Eastern Illinois Railroad at Goreville, 111. The engineer was killed, and the fireman and the flagman were fatally injured. j^ 26. A slight explosion occurred December 31, 1908, on the Rio Grande locomotive at Isabel, Tex. Fireman Juan Leica was terribly burned, and the engineer, whose name we have not learned, was also badly scalded. BOILER INSPECTION. 1427 A^-'r J^onTTn?!^®?* of a locomotive boiler on the Atlantic Coast Line blew out Apnl 3, 1909, at Charleston, S. C. 28. The crown sheet of a locomotive boiler collapsed April 4, 1909, at the Brule Q?°^P°'^P^°y^ Chatam Mine No. 2, Stambaugh, Mich, at ttma CaT^^"^ °* * 1°'=°™°*^^^ exploded April 9, 1909, on the Salt Lake Railroad after th-d t ' ^^^^^^'^ ^^^'^ "^ ^^°^ "^^ injured so badly that he died shortly T5-?i' f t^il^e failed. May 1, 1909, on a locomotive of the Lehigh Valley Railroad, at isilbert, JN . Y. Slight damage. iiT^^\?^,®„l"''^^'^,°* ^ Wisconsin and Michigan Railroad freight locomotive exploded May 11, 1909, at Menominee, Mich. Tij^^^V,9f -^f*^ ^^' ^^^' *^^ ^™^®'' °^ ^°^^^ Coast Railway locomotive exploded at Marshall, Wash. One person was seriously injured. -.J.i' '^^ '^™^®'' °* ^ Kansas City Southern Railway locomotive exploded June 15, 1909, at Hornbeck, La. Three men injured. 35. The boiler of a " Soo " passenger locomotive exploded July 2, 1909, at Eau Claire, Wis. Nobody was in the cab at the time. 36. The boiler of a Santa Fe Railroad locomotive exploded July 8, 1909, at Williams, Anz. J. S. Watts was scalded so badly that he died a few hours later. (This explor sion, as will be noted, occurred on the very railroad that Mr. Austin is connected with.) 37. The boiler of a freight locomotive exploded September 8 at Ellensburg, Wash. One man was fatally injured and two others were injured severely but not fatally. 38. The boiler of a Canadian Pacific locomotive exploded September 22 at St. Augustin, near Montreal, Quebec. Fireman Edward Edwards was instantly killed. 39. On October 11 a boiler belonging to the Chicago, Burlington and Quincy Rail- road exploded at Forest City, 111. One man was fatally injured. 40. The boiler of a donkey engine exploded October 13 at the Lake Whatcom Logging Company's Camp 4, near Bellingham, Wash. Fireman John Larson and Engineer George Beckwith were badly injured and were conveyed to the hospital at Bellingham, where Larson died. 50. On October 16 an eastbound passenger train on the St. Louis and San Francisco Railroad was wrecked near Tahlequah, Okla. As a result of the wreck the boiler of the locomotive exploded, killing Engineer A. P. Vance. 51. The boiler of a freight locomotive exploded October 24 about a mile from Gano Station on the Big Four Railroad, 20 miles north of Cincinnati, Ohio. Oscar Pease and Charles Wycoff were killed outright and Granville Fuller was fatally injured. Two other men were also injured, more or less seriously, but not fatally. 52. The boiler of a Trinity and Brazos Valley Railroad freight locomotive exploded October 27 at Pearland, Tex. Engineer M. E. Tarver, Fireman W. M. Murchison, and Brakeman F. Leach were seriously injured. 58. The boiler of a Grand Trunk locomotive exploded October 29 at Montreal, Canada. One man was fatally injured and three others received lesser injuries. 54. The boiler of a freight locomotive exploded October 30 on the Coal and Coke Railroad near Yankee Dam, 46 miles from Charleston, W. Va. Engineer John Rogers, Firemen W. E. Carruthers and T. J. Finley, Conductor James Riddle, and Brakeman R. B. Thomas were instantly killed and Brakeman Charles Patten was seriously injured. 55. The boiler of Lake Shore locomotive No. 5948 exploded October 31 just east of Geneva, Ohio. Fireman A. E. Crawford was instantly killed and Engineer Harry Braymer was badly injured. 56. The boiler of a freight locomotive exploded November 6 on the New York Cen- tral Railroad at Belmont, near Hornell, N. Y. Engineer Chauncey C. Green and Fireman Christopher Rider were instantly killed and three other men were injured. The freight train was wrecked as the result of the explosion. 57. The boiler of freight locomotive No. 777 of the Seaboard Air Line Railroad exploded November 14 between Richmond, Va., and Petersburg. Engineer C. Ennis was seriously injured and died within a few hours. 58. The boiler of a locomotive belonging to the New York Central Railroad exploded November 17 at Buffalo, N. Y. One person was injured fatally and two others severely, but not fatally. 59 . The boiler of freight locomotive No. 2046, of the Chicago, Burlington and Quincy Railroad, exploded November 18 at Lincoln, Nebr. Fireman George Meecham was instantly killed and Engineer George Pierce and Brakeman Upton were seriously injured. 1428 BOILEE INSPECTION. 60. The boiler of a locomotive used in connection with a construction train exploded November 19 5 miles west of Newcastle, Ind. Engineer Edward Walters was instantly killed and Fireman Glessie Davison was seriously injured. 61. The boiler of a locomotive exploded November 20 on the St. Louis and San Francisco Railroad near South Greenfield, Mo. William O'Brien was injured so badly that he died on the following day. 62. On December 6 the crown sheet of locomotive No. 208, of the Denver and Rio Grande Railroad, collapsed at a point 25 miles north of Santa Fe, N. Mex. Fireman Kincaid was injured. 63. The boiler of a Denver and Rio Grande locomotive exploded December 8 at Blanca, 18 miles east of Alamosa, Cal. Fireman W. B. Chase and Brakeman Joseph Wetsenberger were injured, and the former died of his injuries a few hours later. 64. On December 16 the boiler of locomotive No. 476, of the Chicago, Milwaukee and Puget Sound Railroad, exploded at Miles City, Mont. Engineer James M. Marker, Fireman Frank H. Walters, and Brakeman James E. Bowman were badly injured. Walters died two dajrs later, and at last accounts it was thought that both of the other injured men might die. 65. The boiler of a Baltimore and Ohio locomotive exploded December 18 at the foot of Clark avenue, Cleveland, Ohio. Fireman Thomas Klindel was badly injured. 66. The boiler of locomotive No. 140, of the Rio Grande Western Railroad, exploded December 19 at Salt Lake City, Utah. Fireman L. M. Strick and Brakeman H. B. Williamson were seriously injured. 67. A locomotive boiler exploded December 24 in the repair shop of the Chicago, Rock Island and Pacific Railroad at Shawnee, Okla. Robert Kerr, John Johns, and a boy whose name was not known were killed, and 13 others were more or less severely injured. The shop was almost totally wrecked, and the property loss was estimated' at $100,000. Note. — All the above will be verified by the Hartford Steam Boiler and Inspection Company's official reports. Statement of Pacts. Washington, D. C, March 18, 1910. To the Committee on Interstate and Foreign Commerce, Souse of Representatives. Gentlemen: Appreciating that the committee is very busy and that a written statement will serve my purposes very well, the writer hereinafter sets forth many reasons why the Federal Government should inspect locomotive boilers. The paper's title is "Statement of facfs," and so named, as subjects taken up relate to testimony offered by both sides. The bill H. R. 22066 was drafted by the Attorney-General, who was aided by sug- gestions by those that believe and know that if the bill becomes a law the lives and limbs of railroad employees and the traveling public will be safeguarded. It is needless to state that the Hon. William H. Taft would not look with favor upon this bill if it did not mean anything, as the railroad companies allege. appurtenances. The opposition at the hearing, January 28 and 29, laid great stress that the water glass, an appurtenance, was not necessary. However, they admit that 85 per cent of all locomotives are equipped with them, and I submit three reasons why every loco- motive boiler should be so equipped. The other appurtenances need not be considered, as both sides agree that they are necessary. The federal Doiler-inspection bill has been attacked by some parties, stating that certain fixtures are unnecessary. The water glass appears to be a target, but its use is of more value than the gauge cocks. If it serves no purpose other than to aid the fireman to keep "tab" on the height of the water, it should not be discarded, but it also serves the following purposes: (1) Determines the height of the water when the gauge cocks become stopped up. (2) Determines the height of the water between two gauge cocks. Gauge cocks are usually 3 inches apart; thus the water glass shows actually the height of the water, while the gauge cocks do not. (3) When the water within is foaming, the water is lifted when the throttle is open, and when closed the water drops. When the water within the boiler foams, a careful BOILER INSPECTION. 1429 watch must be maintained, noting the lifting and, drop, and the water glass is very essential m order to make close observations. There are other equally good reasons, but the foregomg will doubtless suffice to show the need of the installation of the water glass. TIME REQUIRED FOR INSPECTION. Mr. Theo. H. Curtis, superintendent of machinery, Louisville and Nashville Rail- road, at the hearing, January 28, stated that the time for a ttiorough inspection ranged from three to ten days, " whereas Mr. Kendrich, vice-president in charge of opera- tion of the Atchison, Topeka and Santa Fe Railway, stated to the Senate commfttee: To thoroughly inspect a single locomotive requires about one day. " I agree with Mr. Kendrich that the inspector will average an inspection a day, but the "actual time" inspecting the boiler will not exceed five hours. The majority of locomotive boilers are inspected in about fifteen minutes, and is a "farce" in the fullest sense of the word. inspector-general's salary. It would seem that when a person sets out to defeat a certain bill he would use what is commonly called "horse sense." Mr. Kendrich, who spoke in opposition to the bill, said, among other things, the following: "Any man who is fitted to occupy the position of inspector-general within the meaiiing or intent of this bill can obtain a much larger salary in the service of a loco- motive manufacturer or a railroad. The salaries that it is proposed to pay to the supervising inspectors are inadequate to secure men who are capable of filling these very important positions, and this provision of the bill alone will make it impossible to obtain men who can properly pass upon designs involving intricate computations and thorough knowledge of the properties of materials entering into the construction of boilers, all of which matters have been considered and determined by thoroughly trained specialists. It is manifestly improper to give to any but thoroughly compe- tent men the right to condemn the work of other men who are thoroughly competent. "Senator Cummins. I want to ask just one question. What do you pay to your chief boiler inspector or general inspector? "Mr. Kendrich. Two thousand five hundred dollars a year. " I am sorry that Mr. Kendrich views his inspector-general so Hghtly that he does not feel justified in paying him the salary that he (Kendrich) says that a competent man could and should receive. Mr. Kendrich, by his own testimony, admits the ineffi- ciency of his inspector-general, but he says, notwithstanding the above statement, that their inspection is thorough; but that can not be when he has a force that he himself rates as incompetent. Before I pass from this subject I wish to call attention to a part of the testimony before the Senate committee of Mr. J. D. Harris, general superintendent of motive power, Baltimore and Ohio Railroad Company. It is as follows: "Section 4 states that the man in general charge of this enormous job shall receive a salary of $5,000 per year, and I just want to say that the figure named is not sufficient to obtain a man fitted by training or experience for work of this character. Such a man is in daily demand by the railroads and locomotive builders at three times the salary named. "Section 5 states that the officers in charge of the districts shall receive a salary of $3,000 per year. Men competent to pass judgment on such matters as design and strength of boilers or the material used in the construction must be men of good tech- nical training and experience. Surely you can not obtain such men of experience for this figure, and unless competent men are in charge what assurance have the raUroads or the public that the boilers are safe for operation? "Section 8. It would appear that it is the idea to make rules governing the inspec- tion uniform on all roads and in all parts of this country. This part, in itself, shows the impracticability of the bill, the unfairness to the railroads, and the lack of knowl- edge of conditions by those who had to do with framing the bill. Conditions in sec- tions of the country differ so much in boiler operation that the rules must be made and applied to suit the conditions. In this I refer more particularly to water and its effect on the life of the boiler and its parts. "Section 9. The number of inspectors is limited to 300. This number, if inspecting under this bill as we interpret it, will not cover one-third of this country. "I note that the local inspectors must be able to form a reliable opinion of the strength of the boiler and its workmanship, suitableness of the form, design, and its arrangement, etc., and these men are to be selected from the boiler-maker class. I 1430 BOILEE INSPECTION. certainly would not rely on any boiler maker of my acquaintance to pass on such questions for me outside of the workmanship." Mr. Harris, as will be noted, says, speaking of the inspector-general: "Such a man is in daily demand by the railroads and locomotive builders at three times the salary named." The salary named in the bill for the inspector-general is 15,000 per year, which is little enough, but Mr. Harris knows that there is not a railroad or a locomotive builder who pay their inspector-general of boilers $15,000 a year. The truth is they do not pay one-half that amount, and you can safely bet that Mr. Harris would raise a big yell" if the Baltimore and Ohio Eailroad paid to their inspector-general of boilers a salary greater than he himself receives. I desire to direct attention to a letter signed by six men each of whom holds a posi- tion as head of the boiler work of the respective railroads that employ them. None of the signers of the letter referred to receive a salary exceeding $3,000 a year, and one or two of them do not receive over $2,000 a year. The letter referred to is as follows: STATEMENT OF GEORGE AUSTIN, Senator Cummins. Very well, Mr. Austin. First, let the reporter take your name and residence and connection with the railroad business. Mr. Austin. My name is George Austin. My residence is Lawrence, Kans. My occupation is that of chief boiler inspector of the Santa Fe Railroad system. I would like to say also for the benefit of the committee, Mr. Chairman, that I have had more than thirty-seven, years' experience in this line of work with some of the principal railroads of the United States, the Pennsylvania, Northern Pacific, Wabash, Texas Pacific. At present I am with the Santa Fe road [reading]: "Washington, D. C, March 4, 1910. "Mb. Chairman and Members of "Subcommittee of Committee on Interstate Commerce, " United States Senate, Washington, D. C. "Gentlemen: We have carefully considered the testimony in connection with bill S. 6702, and beg to submit the following reasons why this should not become a law. "We have noted that the principal argument for the internal inspection of all loco- motive boilers every twelve months has simmered down to two reasons, one of which is that for the sake of safety of employees and the traveling public the flues should be removed and the shell of the boiler inspected once each year, and the other reason is the claim that the boiler can not be inspected for partly broken stay bolts unless the interior is inspected, which can be done only by removing the flues, and this is to be done once in each twelve months. As to the matter of the internal inspection of the boiler, the undersigned are of the opinion that the life of the flues is me best barometer on which to base the period of time at which a locomotive boiler requires internal inspection. The flues are subject to the same adverse conditions as the boiler as regards water and the strains due to the varying temperatures, and, being of lighter material, they are the first to show weakness, and of necessity must be the first to fail; consequently, the life of the flue is a reliable factor on which to base the period for internal examination of the boiler. "Referring to the defective stay bolts, or the feature of partly broken bolts, as being the most prominent reason that has been advanced for the annual internal inspection. It has been testified before this committee that stay bolts are tested with the hammer and a man holding on to the bolt on the outside with a dolly bar and that by this means a stay-bolt tester is able to tell by the sound whether or not a stay bolt is broken. We beg to present to the committee this testimony: That the use of a dolly bar and an assistant to test stay bolts in a locomotive boiler has been discarded long ago in favor of the hammer test only, as the latter has been fouAd to be more accurate, and the dolly bar practically useless. This being the case, it is not necessary to dismantle any loco- motive boiler for the purpose of testing stay bolts, for with the hammer alone, which practice is general throughout the country at the present time, we are able to detect all broken or fractured stay bolts, and it is the general practice all over the country not to allow a boiler to remain in service with two or more adjacent broken bolts. We inspect for fractured bolts and remove the same, where found, until all defective bolts are removed. It is no assistance in detecting broken and fractured bolts to have the flues removed, because the construction of the locomotive boiler does not make it possible to make anything like a thorough internal inspection for fractured and broken BOILEB INSPECTION. 1431 bolts, except of a very small percentage of those bolts located in the immediate vicinity of the forward part of the fire box; the rear part of the fire box being completely inaccessible and obscured. ' ' In view of the fact that locomotive boilers are usually constructed with a factor of safety of from 4J to 6 — in other words, that the materials are strained only from one- sixth to one-fourth of their ultimate strength — we do not consider it unsafe for a boiler to have a number of broken stay bolts, provided the broken bolts are widely scattered or distributed among those that are not broken. However, we find from our regular periodical inspections that this does not occur, and the fact that our boilers do not explode by reason of broken stay bolts and that the fire-box sheets do not show indi- cation of bulging to speak of, is, in our opinion, positive proof that boilers of locomo- tives in service are not in defective condition and that our methods of inspection are efiicient, and at this time we can not see any better method that will increase the safety. "The art of testing stay bolts is not readily acquired by all boiler makers, and even among those who do acquire it some are more expert than others, and a good stay-bolt inspector has some natural talent for the work — the sense of either hearing or feeling, or both — that enables him to develop rapidly in the art. It is within the bounds of truth to state that not more than 5 per cent of the boiler makers working at the trade to-day are capable of reliably testing stay bolts in locomotive boilers. Therefore, we recruit from our ranks those men who seem most likely to develop into capable stay- bolt testers. "Whenever a locomotive is found with broken stay bolts, or any other defects are reported in the boiler or fire box, it is ordered out of service and held until repairs are made and the work approved by us. In this action we have in all cases received the full cooperation of our superior officers. ' ' As men in charge of the boiler work on our respective railroads, we wish to state that from years of experience in this particular work, we know almost at any time on any class of locomotive boiler with which we may be brought into contact, where to first look for defects, and by the records we keep of the periodical inspections, we readily keep track of the boilers, and our knowledge and experience are sufficient to insure the safety of our boilers and their proper care and maintenance, and we again refer to the fact that as we have practically no boiler explosions on account of defective boilers, it is evidence of our success. "It has been charged that in some cases crown sheets give way on account of broken radial stays or crown bolts. In all our investigations we have not seen a case of this kind. The only giving way of crown sheets with which we have met has been due to one cause alone, namely, neglect on the part of the person in charge of the boiler to keep it properly supplied with water. "We consider that it is not necessary to remove flues annually in order to inspect the interior of the barrel of the boiler, from the fact that from our years of experience we know that the boiler shell does not deteriorate materially in less than from 10 to 15 years after the date of its construction. Therefore, it is not necessary to remove flues for the purpose of inspecting the interior of the barrel of the boiler at times other than when flues are removed on their own account. . , • "We do not consider it necessary to dismantle our boilers for the purpose of makmg annual inspection of the exterior of the boiler, for the reason that we know that defects are not found on the exterior of the boiler, except in such cases where steam leaks develop which are exceptional and usually of very slight importance. As a general proposition, we consider it unnecessary to remove the jacket and lagging, except m cases of renewal of fire boxes or repair of leaks of steam that have developed. However, when locomotives go into shop for general repairs, the periodsof such shopping varymg from ten to sixteen months, the boilers are usually stripped mside and outside. "Considering the fact that to-day the raikoads of the country have m then- employ the most capable men who can be procured and who are selected for such positions because their years of experience and training along special lines have qualified them to look after the safety and eflaciency of locomotive boilers, it is our judgment that the enactment of such a bill would not afford greater safety to our employees and the traveling public than exists to-day. On the other hand, we believe that the passage of such I bill would tend to impair the efiiciency of our present organization and in SDme cases would bring a disturbing element between the workmen and then supe- rior officer Some of the present force of the railroads might consider the enactment 1432 BOILEB INSPECTION. of a law of this kind as relieving them in a measure of the vigilance now being exer- cised in the discharge of their duties, thinking that the federal inspectors would assume the responsibility, for which, however, this bill does not provide. "Respectfully submitted. "Abthub E. Brown, "Oeneral Foreman Boiler Department, Louisville and Nashville Railroad. "Geo. Austin, "Chief Boiler Inspector, Atchison, Topeha and Santa Fe. "J. A. DOAMBERGH, "General Master Boiler Maker, Norfolk and Western Railway. "C. E. Elkins "Foreman Boiler Makers, Missouri Pacific Railroad. "B. T. Tarvir, "Foreman Boiler Makers, Pennsylvania Lines West of Pittsburg, Fort Wayne, Ind. "T. J. McKerihan, "Foreman Boiler Makers, Juniata Shops, Pennsylvania Railroad." I desire to direct your attention to a statement in said letter, which is: "Whenever a locomotive is found with broken stay bolts, or any other defects are reported in the boiler or fire box, it is ordered out of service and held until repairs are made and the work approved by us. In this action we have in all cases received the full cooperation of our superior ofiicers." The above statement la well worded, but reference is made to only "broken stay bolts" — not a word is said about fractured stay bolts. The assumption is that "frac- tured stay bolts" come under the classification of "other defects," but as "fractured stay bolts" can only be discovered by an internal inspection, which the railroads admit is not made, they are not reported, and of course not removed. The statement about removing the "broken stay bolts" promptly is not a fact. .As will be noted, the letter referred to is signed by Mr. J. A. Doambergh, general master boiler maker, Norfolk and Western Railway. In an attempt on their part to discredit Mr. Oren Ruefley, who told about their malpractices, they submitted to the Senate committee the official records of engine 961, and when examined by Senator Burkett the following came to light: "Senator BuRKErr. This is the report of engine 961 — ^all of these sheets [indicating]. Now, I want to call attention to what these sheets show, for the reason that it will then be in the record. "The first one shows here, 9/30/5, engine 961 wa!s inspected and there were found 25 broken bolts. In two places there were a cluster of 3 bolts broken. On the reverse side it says 'Not renewed, under the instructions,' showing the engine went out." "The next is 10/20/5. The same engine was inspected and there were found 28 stay bolts broken. On the reverse side, to be signed by the boiler maker, it says 'Not renewed.' The next sheet shows an inspection, 10/24/5. They found 39 broken stay bolts; in one cluster, 7. That at that time was renewed. Then there are several other inspections which I do not care to call attention to as I go along. On the 13th day of May, 1907, this same engine was inspected; 8 stay bolts found broken. It says on the other side that they were not renewed. The next sheet shows 20 stay bolts broken, one cluster of 4 that was renewed. Now, on the 22d of June, 1907, this engine 961 was inspectedi There were 4 stay bolts found; among those were No. 27 in row D and Nos. 26 and 27 in row C of the right side and crown sheet. The next report was — I should say on the reverse of that former sheet it is said 'Not removed.' The engine was then inspected on the 20th of August, 1907, when there were 4 stay bolts found broken, but not the 4 that had been found broken before, and this plate does not show that these stay bolts in rows and D- on the right side were broken, but shows them to be perfect, but finds 4 other and different ones. On the reverse side of that it says 'Not renewed.' "The next inspection of this engine seems to have been on the 29th day of August, 1907, when there were 4 stay bolts found broken, the same 4 as were found in the last report . This report shows that they were not renewed . On the 7th day of September, 1907, the same engine was inspected again and only 2 stay bolt8 were found broken, and neither of these 2 correspond with any of the stay bolts found broken in the previous examinations, and the boiler maker certifies that they were not removed. On the 17th of September the engine was examined again, the next report is, and there were 5 stay bolts found broken, 4 of which correspond with two other examina- tions, being the second and third back. The report of the boiler maker is that they were not removed. On the 19th of October, 1907, the same engine was inspected and there were 5 stay bolts found broken, 4 of which correspond as before. The report is 'not renewed,' by the boiler inspector. BOILER, INSPECTION. 1433 "Senator Kean. How many stay bolts are there in that boiler? "Senator Bukkett. Twelve or fourteen hundred, the testimony is here. Mr. Faulkner. One thousand four hundred and sixty-four. "Senator Burkett. The 7th of October, 1907, the sanie engine shows 3 stay bolts broken and the boiler maker's certificate is 'not removed.' The examination certifi- cate for the 24th of January, 1908, shows 5 stay bolts broken, and the report is they were not removed. The 11th of February, 1908, shows 11 stay bolts broken, the report is 'not removed.' The 21st of February shows 10 stay bolts broken, and the report is 'not removed.' The 28th of December, 1908, shows 18 stay bolts broken, and the report shows they were not removed. The report for the 22d of January, 1909, shows 22 bolts broken, and the report shows they were replaced. The report for March 3, 1909, shows 13 stay bolts broken, and also shows they were not removed. The report shows that stay bolts Nos. 10 in each of rows A, B, C, D in the throat sheet, right side, to be broken, 'not removed.' Report for 19th of August, 1909, shows that 27 stay bolts were broken, and shows that they were not removed. Of these 27, Nos. 10 in the rows A, B, 0, D of the throat sheet, right side, were broken. The next report for the 16th of October, 1909, showed 67 plates broken, among which were Nos. 10 in rows A, B, 0, D, E on the throat sheet for the right side of the engine. The report shows they were replaced." The oflBcial records show conclusively that the statement, to wit: "And it is the general practice all over the country not to allow a boiler in service to remain in service with two or more adjacent broken bolts" is false. The oflBcial records show that engine 961 was in service with seven bolts in one nest; in another instance with four broken bolts in one nest; and the official records show that the boiler was in service almost constantly with broken stay bolts, and the fact was known by the proper official. When you read what the official reports show of engine 961 you read what all the official reports would show if they were placed before you for inspection. It is a safe bet that before the railroads offer other official records they will thoroughly inspect them, even if they do not their boilers. At the first annual convention of the Master Steam Boiler Makers' Association held October, 1902, Mr. Smythe (then foreman boiler maker, Chicago and Alton Railroad, Bloomington, 111.) made the following statement: "I worked for a certain railroad as journeyman, and we had boilers there from which we never did take out all the defective bolts; and I was told that if I found one-half, two-thirds, or seven-eighths of the bolts good, it was all right. Since I have been foreman I have given instructions to take them all out. On the other hand, we may as well face the question here. We may say that we take them all out, but do we? I am just about as rigid on broken stay bolts as anybody I have ever met, and I have found but one man that knew anything about broken bolts, and he knew nothing. I have good experienced men at it; we have tested them with cold water and have not found a partly broken or fractured bolt." Please note that Mr. Smythe says that when he was employed as a journeyman he was told "it was all right" to pass boilers with broken stay bolts. Then he asked the question: "We may say that we take them all out, but do we?" This statement shows actual conditions. Special attention is directed to his statement that partly broken or fractured bolts can not be found by the hammer test. They can only be discovered by an internal inspection, which the raihoads do not make in many cases. At the same convention, Mr. Wolfenden (then foreman boiler maker, Chicago, Milwaukee and St. Paul Raihoad, Milwaukee, Wis.) made the following statement: "I have been inspector tor a number of years tor the St. Paul and Canadian Pacific. I say, where a stay bolt is unsatisfactory, it should be removed at once. When it is broken, put in a new one; if they are in pairs, the strain will come on the new bolt. "A certain road in Delaware — on making a test, I found two bolts broken on the face plates. We fixed them soUd, and after that the engine blew up and killed the engineer, fireman, and conductor. When the engine came back we used extreme care in examining it, and we found that a bolt on the back end had been broken. We went to the other extreme after that and took out every bolt. If we had discov- ered that at first, those three men would not have lost their hves." From Mr. Wolfenden's remarks we learn that three men lost their hves and because a complete inspection was not made. This and other evidence, should, gentlemen, show the need of federal inspection of locomotive boilers. Mr. Austin, of the Santa Fe Railroad, before the Senate committee, m an attempt to upset my remarks made the following statement: "I have in my experience done a great deal of roundhouse work. I have gone into locomotive fire box§s to make repairs, when steam was blowing and water squirting. The question of the steam pressure cut but little figure. I would light a piece of oily 1434 BOILER INSPECTION. waste and throw it in on the grates and see in what direction the steam jet or water was coming from and then if I could I would get in and if it was practical to do so, stop the leak. I was not compelled to do this; that was a matter that was left entirely to my judgment. If I thought it was necessary to have the steam blown off and the pressure reduced on a boiler, there never was any question about it. I never was asked or never have asked anyone, and there is no one in authority who ever will ask a man to go into a place of danger for the purpose of doing work on a locomotive boiler. I mention this for the reason that I note that Mr. Jeffery makes quite a point in his statement when he claims that men had to use shields to get into a fire box to calk a leak." Unquestionably he admits the existing conditions which this bill aims to correct. He says, "And then if I could I would get in." Indeed, but many a boiler he has seen during his years of experience was such that he nor anyone else wanted to go inside the fire box, the boiler under steam pressure, though men had to go inside the fire box to stop the leaks or otherwise look for another position. He admits they leaked so bad that he ascertained "what direction the steam jet or water was coming," etc., before he went inside the fire box. This shows steam and water was flying in all directions, and that instead of fixing the boilers properly the leaks are stopped so the engine can "make another trip." He also states he went inside the fire box of his own accord, and now the question is, Why did he go in and take such chances? The answer is, because the engine was wanted, and he knew it; therefore fixed her up for "another trip," and he also knew that if he refused to "go in" some one else would be engaged who would "go in." He reminds me of a case where a party said he would not do a certain thing "until he got good and ready," whereupon the party addressed got a "six-shooter," and then the first party said, "I am good and ready now." At the annual convention of the Master Steam Boiler Makers' Association in 1906, Mr. F. P. Roesch, master mechanic. Southern Railroad, Birmingham, Ala., made the following statement: "Improper repairs. — To this factor we can attribute fully 20 per cent of our failures. These improper or halfway repairs usually are made in the roundhouse, and are 'due to the chronic shortage of power prevailing on most railroads at some time during the year. The call for power as fast as it can be furnished leads to many jobs being slighted; jobs that may be absolutely necessary at the time, and which the foreman considers can go for another trip, figuring on catching them next trip when he is not so busy. But, unfortunately, this slack time never comes; consequently the job is put off from trip to trip until finally it results in failure. "These halfway repairs refer not only to the machinists, but to the boiler makers; many a time have you fullered up a crack in a side sheet when it should have been plugged; many a time have you expanded a leaky flue with a taper pin when it should have been rolled or beaded. If you watch the matter closely you can see these jobs every day." I would state, gentlemen, that Mr. Roesch's statement represents the conditions that exist. Leaky flues are stopped for the time being as he sets forth, or else are plugged by inserting a cast-iron plug. The conditions are horrible, and I trust all this evidence will show the need of the bill becoming a law. Mr. C. Richards in a paper read before the Northern Railroad Club, January 1909, made the following statement: "Patches on the fire box do not wear as well as they should, because the engines are hurried through the roundhouse, and no more time is taken than absolutely necessary to calk them so as to get the engine out of the shop dry. It is the writer's custom, if the patch is leaking badly, to let the water out of the boiler and calk the patch bolts and seams thoroughly, avoiding chippings as much as possible, as this shortens the life of the patches." It matters not the locality, it is the same old story: "Hustle," "Get her out," "Give her a lick and a promise to do better to-morrow," but "to-morrow" never comes. We have it from all sides how the property of the stockholders and bondholders is abused and destroyed, and how the taking of lives is considered just a "mere incident." In a paper read before the International Railroad General Foreman Association, June, 1909, Mr. J. P. Morrison made the following statement: "There is no line of work connected with the sheet-metal trades which requires better judgment, a more thorough knowledge of conditions, and more ingenuity than does the repairing of old boilers, and this is especially true when the parts repaired are located where they receive the direct impact of the heat. Such is the case with locomotive fire-box repairs. Usually the best mechanic available is given this work; but there are cases where out-of-ordinary conditions exist calling for greatest care and foresight, and the opinions of others is called for before a satisfactory solution is reached. The work described in this article is of the nature referred to, and while BOILEE INSPECTION. 1435 in shops with full equipment for handling work of this kind the repair would have been comparatively simple, in the shop in which the work was done no other method was possible without serious delay, and the contract for making the repair was secured on a promise of quick work. "The work was necessary on account of the side sheets of the fire box cracking between the stay bolts. These cracks had been calked with fullers, chisels, and center punches until the sheets presented an unique appearance, the cracks in the meantime gradually extending to the next stay bolt, and then to the next, until patching was the easiest way out of the difficulty." The second paragraph tells of condiyons that could not exist if locomotive boilers were inspected by federal inspectors. Note how the cracks were calked up, the boiler "in service in an unfit condition," and when it could go no longer the repairs were made; but when made "quantity instead of quality" was sought. At the Master Steam Boiler Makers' Association convention, Chicago, June, 1905, Mr. P. J. Conrath, then traveling boiler inspector, Missouri Pacific and Iron Mountain Railroad, St. Louis, Mo., made the following statement: "I wish to say, gentlemen, in regard to roundhouse work that it is a very important subject. I could speak for an hour and then not do it justice; but I will try to limit my talk to five minutes and go over the thing in a few words. First, the washing should be looked after properly. An engine brought into the roundhouse with 130 or 140 pounds of steam on, blowed down to 50 or 60 pounds of steam, the blow-off cocks working, the water and steam blowing off at the same time, and then filling the boiler up with cold water immediately afterwards. We all know that such proceed- ings would produce such a contraction that it would crack anything. That is the way it is done in nine-tenths of the railroad shops to-day." Please note, gentlemen, that Mr. Conrath charges willful abuse of the locomotive boilers by petty railroad officials, and the practice he makes mention of exists in "nine-tenths of the railroad shops to-day." He is right, and I speak from personal knowledge. Mr. Conrath, in the course of his remarks, also said: "I am not in favor of calking up cracks in a fire box. I think where a crack exists in a fire box and you get in with a calking tool, then fuller over the crack, you will make a job that will get the engine out of the roundhouse, but not over the road. I think it should be patched." I say, gentlemen, "Read, think, and then, for the sake of safety, act." At the General Foremen Convention, Chicago, May, 1908, Mr. G. E. Bronson, Chicago, Rock Island and Pacific Railroad, made the following statement: "Who should determine when to stop an engine? And who should furnish work reports? The mileage made by an engine should, to a great extent, govern the shop- pings, but in many cases where the engines have not made their allotted mileage and are unfit for service, continually having failures on the road, then the general foreman and road foreman of equipment should take these cases up with the master mechanic, stating the facts. The work reports should be furnished by the engineer who runs the engine, if regularly assigned to this engine, by the engine inspector, and round- house and road foreman of equipment. If engine is in pool service the report from the engineer would be done away with. Also when engine arrived at shops and was stripped, a competent inspector should go over every part thoroughly, noting wear of parts, adding his report to that of the others for the information of the general shop foreman." , . , j.- ■ Mr Bronson's statement means a great deal. He speaks of locomotives m service when in an "unfit condition," and remain in service notwithstanding the continual "failure on the road"— and the reason they are in sarvice is because they have not made the "allotted mileage." He asks the question: "Who should determine when to stop an engine? " No such question need be asked, as far as the boiler is concerned, if this bill becomes a law. , ,, , The "pool service " is brought out, and Mr. Bronson shows that an engineer, running one engine one trip and another engine the next trip, etc., can not be held respon- sible for the condition of the engine and should not be expected to furnish a report. He also says "When engine arrived at shops and was stripped, a competent inspector should go over every part thoroughly," and now I call your attention to the statement of Mr. Arthur E. Holder, of the legislative committee, American Federation of Labor. ^'The boUer of a locomotive is, to use a metaphor, the heart of a railroad. It is the most vital of all the mechanical instruments employed, and it is the most abused. As will be noted the bill provides for a "competent inspector to go over every Dart thoroughly, " as Mr. Bronson suggests. Further, it provides that the railroads are to make monthly inspection, reporting to the government inspector, and the 23738— PT 26—10 5 1436 BOILER INSPECTION. latter may call on the railroad employees for statements in regard to the condition of the boiler, and in all Mr. Bronson's suggestions and the bill are in strict harmony with each other. At the fifth annual convention of the International Railway Master Boiler Makers' Association, May, 1906, Mr. C. F. Shoemaker, of St. Thomas, Ontario, Canada, made the following statement: "When boilers are brought into the roundhouse they should not be blown off in too big a hurry. They should have as much time as possible to cool down, for this is the place that causes stay bolts to break. All boilers should be washed with hot water. Stay bolts should be tested every thirty days, at least, by hammer test. This will cause scale to fall off of stay bolts, more or less, and not allow them to corrode, as I have seen stay bolts with one-half inch of scale on them. When testing stay bolts, if you find one broken bolt, take it out; don't think, 'Well, we will let it go; that don't amount to anything.' These stay bolts are put in for a purpose. If one bolt is broken it means that much more strain on the stay bolts around it, and the first thing you know there will be six or eight stay bolts broken; and we all know it is cheaper to take one stay bolt out than it would be to take out six or eight." When the foremen boiler makers at their own convention take up such subjects it is self-evident the proper inspection and repairing of boilers is not done. It stands that stay bolts are put in for a "purpose," and if not removed when broken the trouble spreads until there are "six or eight stay bolts broken," and a little later a boiler explosion, which, of course, according to the railroads, was due to "low water." Can you blame, gentlemen, the men who are in the cab for advocating this bill? Mr. Austin, of the Santa Fe Railway, in opposition to the bill, stated to the ''enate committee as follows: "Mr. Jeffery states that a partly broken or fractured stay bolt can only be discov- ered by looking inside the boiler, the evident intention being to create the inference that it is necessarjr for anyone who wishes to discover whether there are any partly broken stay bolts in the boiler to get inside of it. This is not the fact, for several reasons, the principal of which is supplied by Mr. Jeffery himself later, on page 69, last paragraph. These are his words: "'That practically all stay bolts have a small hole in the end of them, 1} inches deep; that some have a hole clear through them. This is called a telltale hole, and if the bolt breaks the water oozes out of it. This telltale, or, as they are other- wise known, "detector holes," are in the center of these stay bolts on the outside.'" It is too bad that Mr. Austin can not rightly read and properly interpret my re- marks, but maybe the following, which is an editorial appearing in the Boiler Maker, October, 1907, will be of interest: "The requirements of the New York laws for the inspection of locomotive boil- ers, regarding stay-bolt testing, may not differ very much from the usual require- ments of most railroad companies, but, at the same time they admit of no careless- ness. More boiler explosions can be traced to broken stay bolts than almost any other cause. The only way to successfully prevent these failures is by careful and thorough inspection. It is better to have a few good bolts removed by mistake than to leave a number of broken ones in service. The failxire of one bolt places an excessive strain on the neighboring stays, with the result that the trouble soon spreads. The best method of testing the bolts may be a subject for discussion, but an experienced inspector will usually have little difficulty in detecting a failure either when the boiler is under hydraulic pressure or when the fire sheet is free to vibrate. The bolts should always be tapped on the fire side, and if there is no pressure on the boiler the water should all be drained off, as otherwise a breakage might pass unnoticed. Telltale holes may give warning of a broken bolt when in service, but it is too easy for these to become plugged to depend upon them absolutely." The majority of railroads find it easier to plug the telltale hole than to remove the bolt, and adopt the former course in the majority of cases. Most locomotive boilers have about 60 per cent of the stay bolts covered, thus prohibiting the noticing of the warning given by the telltale hole. When the escaping steam from a number of fractured and broken bolts makes it almost impossible for the engineer and fireman to remain in the cab, then the jacket might be removed, and the telltale holes plugged, and the locomotive continues in service with its boiler in an "unfit condition." Mr. Malley, foremto boiler maker, St. Louis and San Francisco Railroad, Spring- field, Mo., at the Master Steam Boiler Makers' Association Convention in 1902, said: " We have a man who goes in the fire box to inspect the stay bolts. He does not pretend to find the fractured ones. He takes out the broken ones, and examines all around . He keeps that up until he puts in all that are necessary. ' ' The stay-bolt inspector need not attempt "to find the fractured ones "for he knows full well that it is useless. As stated, "fractured bolts" can only be discovered by an internal inspection. Mr. Malley in the course of his remarks stated: BOILBB INSPECTION. 1437 " I will cite you an instance of about 18 new engines which we received about a, year and four months ago. One of them ran eight months and finally we discovered one broken. Sent the inspector back and he just found that one bolt broken. I told him to inspect those boilers every trip. The next trip they took out six. We watched the other ones and finally they began to break. Wnen they came into the shop we found as high as 400 and 450 cracked and fractured bolts. I believe if every foreman here would watch the broken stay bolts and take out every fractured bolt, no matter what the cost, he will have a good reputation; but if you let them go it will cost you your reputation. " The fact tha Mr. Malley ordered the inspector to inspect the stay bolts after each trip indicates that he doubted very much if the boiler was safe. It is certain that he wanted to prevent an explosion. Then, he states, notwithstanding the close watch maintained, that when the boilers went in the shop for overhauling, he found (by an internal inspection — not by the hammer test) as high as 450 partly broken or fractured stay bolts. At the Master Steam Boiler Makers' Association Convention, June, 1905, Mr. Gray, foreman boiler maker, Chicago and Alton Railroad, Bloomington, 111., made the fol- lowing remark: / "We had some stays about 22 inches long, and the inspector examined them and he said they did not sound right to him; said they sounded about like a man holding a block of wood on top; he got another man to try them and they did not either one think they were broken. I had the dome cap taken off and we found they were broken. That gave us information how a radial stay sounded when it was broken, and we found quite a number from time to time. Whenever we could remove the dome cap we would examine them all up next to the wagon top, and we would find some in the third row and some in the fourth row. " The radial bolts were found broken only from the internal inspection, and Mr. Gray says: "Whenever we could remove the dome cap," etc., they made examination — that is, an internal examination, which resulted, as will be noted, in finding a number of broken bolts. The words "whenever we could remove," shows that this was not a regular practice, and, of course, shows that fractured bolts were not and could not be found by the hammer test. If they could, Mr. Malley never would have found as high as 450 fractured bolts in the boiler when it came into the shop for general repairs. Mr. Austin, who appears to have been selected by the railroads to upset my testimony before the Senate committee, says: "When Mr. Jeffery says that 50 per cent of these defects can be traced to poor inspec- tion, he is putting up a statement that, so far as my experience goes, is not justified by the actual conditions. I do not believe that it was the condition of the railroads that he speaks of, his testimony to the contrary notwithstanding. He makes a state- ment in which he says that sometimes we make proper inspection, but it was the exception and not the rule, and yet fails to show a single instance where a boiler that was not properly inspected did blow up." I think the best way to reply to Mr. Austin is to state what others, at one time or the other, have said on this subject. Maybe he will take a second thought from now on, and not tell so much about what he does know, or attempt to express an opinion in regard to a condition that I knew prevailed, and because I was there. At the fifth annual convention of the International Railway Master Boiler Makers' Association, held May, 1906, Mr. George Wagstaff, then supervisor of boilers. New York Central lines, made the following statement: "If we men who are absolutely responsible for the test of locomotive boilers would insist that the boilers be tested, we would be making a step in the right direction. Just as sure as you test one boiler every six months and another every year, you are going further into the hole. If you are going to do the thing at all, do it systemat- ically " Mr Wagstaff recommends just what this bill will bring about— and that is, "system- aticailv " The indifferent method of inspection was such that Mr. Wagstaff felt called upon to call their attention to the direction in which they were traveling or in other words they are going ' ' from bad to worse ; ' ' hence the need of the federal boiler- ^At^ ^the°^Master Steam Boiler Makers' Association convention, October 1902, Mr. Gushing, foreman boiler maker, Cleveland, Cincinnati, Chicago and St. Louis Rail- road, Bellefontaine, Ohio, made the following remark: • . u "In regard to the inspection of boilers, I do not know how a man can inspect by going intS the fire box only. Everybody knows these boilers go into the shop at least light or ten months the first year and after. I think it is the foreman s place to have the boiler thoroughly cleaned out; get inside himself and chip a V in the lap to look for corrosion under the lap. Look after the braces and see if they are all nght; 1438 BOILER INSPECTION. look after the stay bolts; and then take out three rivets in the most important part of the boiler, according to his opinion. If he finds no crystallization he does not need to reduce the pressure." It is evident from Mr. Cushins's remarks that many foremen boiler makers do but little inspecting themselves. This is the case with a large shop, as the foreman has sufficient correspondence to almost tie him to the office, and the best he can do is to pass through the shop, giving orders to his assistants as to what to do. The govern- ment inspector can make the inspection that Mr. Gushing says should be made on the shell, the braces, the stay bolts, etc. The time required to do this will not exceed five hours per boiler. At the convention referred to, following Mr. Cushing's remark*, Mr. Wolfenden, foreman boiler maker, Chicago, Milwaukee and St. Paul Railroad, Milwaukee, Wis., said: " How would you proceed in the first place? Would you go inside and not take the cover off? You have no sidewalk; you just inspect it from the inside; you must go on the outside. Of course, we are getting on dangerous ground with our employers, but 5 say this: If we are going to have an organization, let us stand our ground. Have the boiler uncovered. Sound the boiler, examine it for pitting and leaking. Test the boiler. Insist on the flues being taken out, and then examine it. Find the limit of pressure. Take the flues out and examine it on the inside. Look for corrosion along the seams. You can not inspect a boiler from the outside only. The boiler must be uncovered just the same as when it was built. " For your information, gentlemen, I would state that the Master Steam Boiler Makers' Association (the name has since been changed) is not a secret association. The asso- ciation was founded for the purpose of education of foremen boiler makers by the exchange of ideas, and the betterment of boiler construction. It was pointed out that " betterment ' ' could be secured if the foremen were permitted to make proper inspec- tion and repairs, therefore a movement was started by some members of the association along the lines of the bill you gentlemen are considering, but the movement was of short order, and for the following reasons: The railroads made it known that if the association was leaning in the direction of having laws passed, they, the foremen, would be on duty when the convention was supposed to assemble, and such things as transportations, expenses, etc., would not be m evidence if the members were not careful what they said and done. The need of good inspection when constructing new boilers is well brought out by remarks of Mr. W. T. Lowe of the Canadian Pacific Railroad at the Master Steam Boiler Makers' Association convention, held at Chicago, 1905. Mr. Lowe said: " Not long ago we had an engine come to us from the American side and while we do not mean to say that we build them perfect ourselves, at the same time we are good fault finders, and there is no harm in being a fault finder. " In the first place by looking into the alignment of holes, we found that they were not in proper alignment; they were not opposite each other; that, of course, is not a good feature in a staybolt. Another thing I always found to the best advantage is to have the inside fire-box holes at right angles, not in such a way that the thread would run out by the inside holes' being at an acute angle. " In January's (1906) issue of the Boiler Maker, Mr. M. E. Wells, mechanical engineer, Baid in a few words the necessity of internal inspection. He says: "I want to call your attention to the marked corrosion one always finds on the external bends of flanges in flue sheets and fire boxes. I understand perfectly that the enamel of the iron was broken in the flanging, and put the iron in a condition to- be easily attacked by the corrosive action of the oxygen and carbon dioxide in the water; but what I' want to call yoiu- attention particularly is that if the boiler is not cooled uniformly, there is always more or less bending action going on at these points, keeping the protective scale broken off and opening the corrosive spots already started to more continued corrosion. We are positive about this bending or disturbing action of the iron, because we have seen where crowfoot braces have been applied to the flat surface of sheets, and the enamel of the iron has not been distributed. Yet I have seen almost as bad corrosion take place around the feet of these crowfoot braces as I have seen in any bent flange; showing that these braces have, by pulling and pushing, put sufficient bending strain ia the iron around the feet to keep the scale off and thus allow corrosion." Mr. Kendrich at the hearing, March 3, Senate committee, stated that the hydro- static test, as given in the bill, was excessive, and, to show that it is not, I submit the following: The factor of safety as applied to a steam boiler is imiversally considered to mean the proportionate pressure, calculated from the tensile strength of the plate and the efficiency of the riveted joint. The ' ' elastic limit " of flange steel is about 50 per cent of the ultimate strength of the plate. Elastic limit means the point where the applied BOILER INSPECTION. 1439 strain begins to produce a permanent longation. Up to that point the metal will yield slightly, but when the load is removed the metal will return to its original length, just like india rubber. It is never safe to place a load on any structure beyond this point. A boiler constructed for a working pressure of 100 pounds steam pressure per square mch, factor of safety 5, would burst at approximately 500 pounds pressure per square inch, but the danger point would be reached at 250 pounds (or the elastic limit) if the square of the section of the plate in the longitudinal seam is equal to the shearing strength of the rivets. This is assuming, of course, that the efficiency of the riveted joint is determined by the plate, maximum net section, and the efficiency of the rivets exceeds the latter to some extent. With a factor of 4 (which is often used) the boiler will show signs of distress at 200 pounds pressure, for as soon as the elastic limit of the plate is reached the plate begins to reduce in area, consequently a loss of strength ensues which can never be regained. The factor of safety of 5 is, in my opinion ample m all cases for a boiler shell properly constructed. We must not assume that a boiler constructed (factor of safety 5) for 100 pounds steam pressure will be able to sustain a hydrostatic pressure of 250 pounds per square mch without serious and permanent injury to the plates, and the foregoing, as will be noted, is at the ratio of 2i to 1. However, the ratio as named in the bill is only li to 1 . Therefore, it will be seen that there is a big margin left, and those that have expressed fears have no grounds for same. When the railroads understand this sub- ject, which I do not think many of them know anything about, there will be no com- plaint along this line. The hydrostatic test as named in the bill, I would state for your information, gentlemen, is the generally used ratio throughout the entire world- Canada, England, etc. I would hardly consider the subject complete unless I brought to your attention the number of boiler explosions in England as compared with the United States. The Mechanical Engineer, of London, in its issue of December, 1905, devoted considerable editorial space to the frequency with which boiler explosions occur in the United States, saying, among other things : "We have on previous occasions called attention to the greater frequency of boiler explosions in the United States as compared to this country. An exact comparison is not possible, as the data collected in the States is of an unofficial and very incomplete character, as compared with that available here, where, under the provisions of the boiler explosions acts, notification of every casualty, however trifling, whether on sea or land, resulting from the failure of steam apparatus, has to be made to the board of trade and is included in the official returns, whereas in the States the only figures available are those collected by the Hartford Boiler and Inspection Company, which are admittedly incomplete and only include disasters of such importance as those which furnish material for newspaper comment, and hence omit many disasters that occur in isolated districts far from the reach of the reporters. The figures, however, taken on this basis suggest a lamentable disregard of care and precaution in the working of the steam boiler, with its consequent injury to life and limb for which the United States has attained in many other directions an unenviable notoriety. "The current issue of the Locomotive, a little contemporary published by the company in question, gives the following summary of the explosions that have occured during the past year, and also the totals for several previous years, from which it will be seen that our comments are in no way exaggerated: 1900. 1901. 1902. 1903. 1904. 373 268 520 423 312 646 391 304 529 383 293 522 391 Killed 220 394 "A comparison of the above figures with those furnished in the last annual report by the board of trade on the working of the boiler explosions acts is instructive. This report gives the statistics of persons killed and injured from the working of steam apparatus throughout the whole of the United Kingdom, and on board all British steamships since the year 1882, when the acts first come into force, and shows that during the years named the number of lives lost and the persons injured from accidents of every description in this country averaged 28.6 and 60.6, respectively. "Having regard to the imperfect nature of the figures relating to the States, it is not an exaggeration to say that there are more people killed and injured by boiler explosions in a month in America than in this country in the course of a year. "A correct comparison of the toll of fatality would, of course, take into account the number of boilers employed in the two countries. With the respect to this, no exact 1440 BOILER INSPECTION. figures are available, but we credit the United States with 50 per cent more boilers than this country- — a liberal estimate — it will be seen that the sacrifice of life in the United States is far in excess of which it ought to be, and incidentally proves the efficiency of the work of inspection so admirably carried out by the inspection in this country, and the immunity from danger which steam users as a consequence enjoy." I trust, gentlemen, you will see the need and the wisdom of the bill in question becoming a law. Respectfully submitted. " — ■ [H. R. 2S924. Sixty-first Congress, second session.] A BILL To promote the safety of employees and travelers upon railroads by compelling common carriers engaged In interstate commerce to equip their locomotives with safe and suitable boilers and appurte- nances thereto, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the provisions of this act shall apply to any common carrier or carriers, their officers, agents, and employees, engaged in the transportation of passengers or property by railroad in the District of Columbia or in any Territory of the United States, or from one State or Territory of the United States or the District of Columbia to any other State or Territory of the United States or the District of Columbia, or from any place in the United States to an adjacent foreign country, or from any place in the United States through a foreign country to any other place in the United States. The term "railroad" as used m this act shall include all the roads in use by any common carrier operating a railroad, whether owned or operated under a contract, agreement, or lease, and the term "employees" as used in this act shall be held to mean persons actually engaged in or connected with the movement of any train. Sec. 2. That from and after the first day of January, nineteen hundred and eleven, it shall be unlawful for any common carrier, its officers or agents, subject to this act, to use any locomotive engine propelled by steam power in moving interstate or foreign traffic unless the boiler of said locomotive and appurtenances thereof comply with me following requirements: Such boiler must be well made, of good and suitable material; the openings for the passage of water and steam, respectively, and all pipes and tubes exposed to heat must be of proper dimensions and free from obstructions; the spaces between and around the flues shall be sufficient for proper circulation. Such boiler must be equipped with a steam-pressure gauge, safety valve, gauge cocks, and water glass, means of removing mud and sediment from boiler, and all such other machinery and appurtenances as are requisite for the proper and safe operation of such boiler in the service to which the same is J)ut, all of which shall be of such shape and arrange- ment that the boiler can be properly inspected, and of such condition that the same may be safely employed in the active service of such carrier in moving such traffic without unnecessary peril to life or limb. Such boiler must be able to withstand a hydrostatic test in the ratio of one hundred and fifty pounds to the square inch to one hundred pounds to the square inch of the working pressure. Sec. 3. That there shall be appointed by the President, by and with the advice and consent of the Senate, an inspector-general and two assistant inspectors-general of locomotive boilers, who shall have general superintendence of the inspectors herein- after provided for, direct them in the duties hereby imposed upon them, and see that the requirements of this act and the rules and regulations made hereunder are observed by common carriers subject hereto. The said inspector-general and his two assistants shall be selected with reference to their practical knowledge of the construction and repairing of boilers and to their fitness and ability to systematize and carry into effect the provisions hereof relating to the inspection and maintenance of locomotive boilers. The inspector-general shall receive a salary of five thousand dollars per year, and the assistant inspectors-general shall each receive a salary of three thousand dollars per year; and each of the three shall be paid his traveling expenses incurred in the per- formance of his duties. The office of the inspector-general shall be in Washington, District of Columbia, and the Interstate Commerce Commission shall provide such stenographic and clerical help as the business of the offices of the inspector-general and assistant inspectors-general may require. * Sec. 4. That immediately after his appointment and qualification the inspector- general shall divide the territory comprising the several States, the Territories of New Mexico and Arizona, and the District of Columbia into one hundred locomotive boiler- inspection districts, so arranged that the service of the inspector appointed for each district shall be most effective, and so that the work required of each inspector shall BOILER INSPECTION. 1441 be substantially the same. Thereupon there shall be appointed by the Interstate Commerce Commission one hundred inspectors of locomotive boilers. Said inspec- tors shall be in the classified service and shall be appointed after competitive exami- nation according to the law and the rules of the Civil Service Commission governing the classified service. The inspector-general shall assign one inspector so appointed to each of the districts hereinbefore named. Each inspector shall receive a salary of one thousand eight hundred dollars per year and his traveling expenses while engaged in the performance of his duty. He shall receive in addition thereto an annual allowance for office rent, stationery, and clerical assistance, to be fixed by the Inter- state Commerce Commiggion, but not to exceed in the case of any district inspector six hundred dollars per year. To become eligible for the examination hereinbefore provided for, the applicant must show that he has had at least five years' experience as a journeyman in the construction and repairing of steam boilers; and in order to obtain the most competent inspectors possible it shall be the duty of .the inspector- general to prepare a list of questions to be propounded to applicants with respect to the construction, repair, and operation of locomotive boilers, which list being approved by the Interstate Commerce Commission shall he used by the Civil Service Commission as a part of its examination. Sec. 5. That the inspector-general shall prepare from time to time rules and regu- lations not inconsistent herewith for the inspection, testing, and repair of locomotive boilers, to be observed by the carriers subject to this act, which rules and regulations, being approved by- the Interstate Commerce Commission, and a copy thereof being served upon the president, general manager, or general superintendent of each of such carriers, shall be obligatory, and a violation therpof punished as hereinafter provided. The inspector-general shall also make all needful rules and regulations not inconsistent herewith for the conduct of his oflice, and for the government of the district inspectors: Provided, however, That all such rules and regulations shall be approved by the Interstate Commerce Commission before they take effect. Sec. 6. That it shall be the duty of each inspector to become familiar, so far as practicable, with the condition of each locomotive boiler ordinariljr housed or repaired in his district, and if any locomotive is ordinarily housed or repaired in two or more districts then the inspector-general or an assistant shall make such division between inspectors as will avoid the necessity for duplication of work. Each inspector shall make such personal inspection of the locomotive boilers under his care from time to time as may be necessary to fully carry out the provisions of this act and as may be consistent with his other duties, but he shall not be required to make such inspections at stated times or at regular intervals. His first duty shall be to see that the carriers make inspections in accordance with the rules and regulations established by the inspector-general and approved by the Interstate Commerce Commission, and that carriers promptly repair the defects which such inspections disclose. To this end each carrier subject to this act shall file with the inspector in charge, under the oath of the proper officer or employee, a duplicate of the report of each inspection required by such rules and regulations, and shall also file with such inspector, under oath of the proper officer or employee, a report showing the repair of the defects disclosed by the inspection. The rules and regulations hereinbefore provided for shall prescribe the time at which such reports shall be made and defects repaired. Whenever any dis- trict inspector shall, in the performance of his duty, find any locomotive boiler or apparatus pertaining thereto not conforming to the requirements, of the law or the lufea and regulations established and approved as hereinbefore stated he shall require the same to be placed in proper condition by the carrier in whose service the said locomotive boiler is employed, and shall so notify the carrier in writing that the locomotive is not in serviceable condition, and thereafter such boiler shall not be used until in serviceable condition, and until the inspector in charge has so certified. Sec 7. That the inspector-general shall make an annual report to the Interstate Commerce Commission of the work done during the year, and shall make such recom- mendations for the betterment of the service as he may desire. Sec 8 That in the case of accident resulting from failure from any cause of a loco- motive boiler or its appurtenances, resulting in serious injury or death to one or more persons a statement forthwith must be made in writing of the fact of such accident, bv the carrier owning or operating said locomotive, to the district inspector of the dis- tnct in which said accident occurs. Whereupon the fact concerning such accident shall be investigated by said inspector or by the inspector-general oi one of his assist- ants And where the locomotive is disabled to the extent that it can not be run by its own steam, the part or parts affected by the said accident shall be preserved by said carrier intact, so far as possible without hindrance or interference totrafiic, until after said inspection. The district inspector or inspector-general or an assistant shall 1442 BOILER INSPECTION. examine or cause to be examined thoroughly the boiler or part affected, making a full and detailed report of the said accident. Sec. 9. That any common earner violating this act, or any rule or regulation made under its provisions, or any lawful order of any inspector shall be liable to a penalty of three hundred dollars for each and every such violation, to be recovered in suit or suits to be brought by the United States attorney in the district court of the United States having jurisdiction in the locality where such violation shall have been com- mitted ; and it shall be the duty of such attorneys, subject to the direction of the Attor- ney-General, to bring such suits upon duly verified information being lodged with them, respectively, of such violations having occurred; and it shall be the duty of the inspector-general of locomotive boilers to give information to the proper United States attorney of all violations of this act coming to his knowledge. Committee on Interstate and Foreign Commerce, House of Kepresentatives, Tuesday, Mm/ 17, 1910. The committee met at 10.15 o'clock a. m., Hon. James E,. Mann (chairman) presiding. STATEMENT OF ME. A. A. EOE, EEPEESEFTING THE BEOTHEE- HOOD OF LOCOMOTIVE FIEEMEN AND ENGINEEES AND THE BEOTHEEHOOD OF EAIIEOAD TEAINMEN. Mr. Roe. Mr. Chairman, those in support of the boiler-inspection bill are very anxious to have General Uhler, Supervising Inspector- general of the Steamboat-Inspection Service, appear before this com- inittee, but we learn that he is unavoidably out of the city and will not be here for the next two weeks, and therefore, Mr. Chairman, we would like very much to have a statement which was made by General Uhler before the Senate Committee on Interstate Commerce on this same subject incorporated in the hearings before this committee. The Chairman. I suppose there is no objection to that, but I sup- pose we will probably want to hear General Uhler before the com- mittee before we are through, or at some subsequent time. Mr. Roe. That is very satisfactory to us if it can be arranged, but if it can not be arranged so that General Uhler can appear before this committee, I would like to have inserted in the record here his state- ment before the Senate committee. There has b6en so much said on this subject that I feel that it is unwise to take up any further time in the discussion of the bill, and I feiel that the general principles contained in this legislation have been thoroughly gone over in the enactment of legislation in the interest of human life. Every instrumentality of transportation from the locomotive to the motorcycle is to-day under government supervision, either municipal government, state government, or Na- tional Government, and thereforel say that the principles contained in the legislation are so well grounded and have so generally received the stamp of approval from both state and national governments that I believe it is unnecessary to further discuss them. The Chairman. Mr. Roe, Mr. Townsend yesterday introduced the bill H. R. 25294, which I understand is the bill that we ordered printed in the hearings of yesterday ? Mr. Roe. Yes, sir. The Chairman. That is your understanding ? BOILER I]SrSJ?ECTION'. 1443 Mr. EoE. Yes. The bill referred to, Mr. Chairman, is the result of protracted conference with the supporters of the principle of boiler inspection. This being new legislation, and there being a wide diversity of opinion among those who are earnestly endeavoring to enact legislation to ameliorate the conditions of which we are now complaining, taking that into consideration and in the interest of economy we have felt that it was best to modify the original bill introduced by Mr. Townsend with a view to making it possible to cut down the expense mcidental to carrying the original bill into operation, by making it the duty of the common carriers making inspections along the lines that are prescribed by the boiler-inspection board, as created in this bill, to also report the repairs made of the defects brought out by the inspection, and to create local inspectors enough to ascertain whether or not the railroad company is making the inspections and maldng the repairs as prescribed by the board. That is the purpose of the bill as it now stands, Mr. Chariman, and we figure that the expense to the Govemraent would not exceed $350,000 to $400,000 a year, and we hope by this method to establish the principle, and believe that it will develop within a reasonable length of time, say, one or two years, whether or not we have been wise in reducing the number of inspectors; and if so, well and good. If not, we will then have ample opportunity to increase the number to meet the interests of the service. It might be well before closing this argument entirely to call attention in a general way to what has been said — to make a sum- ming up. It occurs to me that all parties here, whether supporting or opposing the measure, are employees of the common carrier. We are not radically different. Those who are supporting the measures are representing' the employee who is directly affected, who handles the engine, rides upon it, and is constantly about the engine, and exposed to the dangers incidental to the operation of machinery of that kind. Mr. Bartlett. May I ask you a question right there ? Mr. Roe. Yes, sir. Mr. Bartlett. You speak of the locomotive engineers and fire- men and the Brotherhood of Trainmen, all of them as now advocating this measure. Of course there is an association of locomotive engineers and then there are the firemen, and then there are the railroad trainmen. Whom do you include when you say "those supporting tliebiU?'' ^ , . , J ,^, . Mr. Roe. The employees represented here include the engineer, the fireman, the conductor, the trainman, and the yardman. Mr. Bartlett. You used the word "trainman." I understood that the Association of Railroad Trainmen included all the employees; that the engineers and firemen and conductors had their own asso- ciations, but that the association of trainmen was an organization that embraced all. Is that correct? , x ^u Mr. Roe. That is an organization that embraces the conductor, the brakeman, and the yard man. Mr Bartlett. It does not embrace the engineer ( ■ ■ u Mr. Roe. No, sir. It embraces every thingbehmd the engine m the way of men. 1444 BOILEB INSPECTION. Mr. Baetlett. The reason I asked is that I have letters from trainmen and engineers and conductors, and also from men who work in the shops. Mr. Roe. On the other hand, Mr. Chairman, these men who are here opposing the bill are employees of the carrier, and I am wilUng to concede that they are honestly endeavoring to do what in their judgment is right.' But I think that is important. These men are perhaps here by direction of a higher authority — ^general managers or committees — and the standing of those men and those who are here in support of the measure, I think, should be taken into con- sideration. You have heard those who have been in the past charged with mak- ing these repairs state that the repairs were not made in compliance with the inspection. You have also heard those who were opposing the measure state that certain rules and regulations have been laid down for this inspection. They have submitted their official docu- ments showing what this inspection is. You have also heard that on the reverse side of these same reports it is shown that the repairs were not made. There seems to be abundance of evidence to show that a great number of locomotive boilers are being constantly operated in an unsafe condition. That is, briefly, what has been stated before the committee in that regard, and it can, of course, be considered for what it is worth. There is a difference in opinion, the statements conflict, and it seems that it is up to this committee, it is up to Con- gress, to ascertain or judge whether or not these inspections and repairs are being made, and whether or not these locomotives are being operated in an unsafe condition. It seems to me that is the question. Mr. Baetlett. Well, is that all the question ? While whether they are being operated in a safe or an unsafe condition is one question, another consideration is that although they may up to the present time have been operated in a safe condition, if Congress has the power and the authority to do it, should it not provide for safe oper- ation regardless of whether there has been any abuse by the railroads, or any neglect on the part of the railroads ? The steamboat-inspec- tion law was not passed so much, I apprehend, because of fatal ex- ?losions of boilers as to provide for the safety of those who travel, t has occurred to me that it would not be altogether the thing for you to put your case absolutely upon the proposition that the evi- dence shows that they have not done all that they should have done; but our province in the matter of legislation is to provide safety ap- pliances for the future, whether they nave done in tne past what they ought to have done or not. Mr. Roe. That is very true; but if, in the judgment of these men who operate these locomotives, who are about them at all times, they were in a safe condition, we would not be asking for this legis- lation. Mr. TowNSEND. Mr. Roe, as I understand it you would be satisfied if you could be assured that the locomotive engines were going to be thoroughly inspected according to the best standard known, and if when defects were discovered they were properly repaired ? Now, if such a standard could be established and sufficient penalties imposed to insure the observance of the rules laid down, you would not be so BOILEE INSPECTION. 1445 particular in the first instance as to how many of these inspectors there should be; would you ? Mr. Roe. Yes. Mr. TowNSEND. Could not that, to a certain extent, be safely left to n ^ board, and to the Interstate Commerce Commission, as they shall find it necessary from time to time to appoint men to investigate as to whether the rules have been observed or not ? Mr. EoE. I can say this, Mr. Townsend, that we are only interested m havmg the locomotive properly inspected and in having those repairs properly and promptly made which the inspections develop are necessary. That is our object. As to the number of local inspec- tors, while it is quite possible that the Interstate Commerce Commis- sion or the board may be as accurate in fixing the amount or the number as we would be, we feel in placing the number at 100 that we are very liberal, because we believe it would require at least that number of men in order to give a proper supervision of the vast num- ber of locomotives that must be in each local territory. With some 66,000 locomotives it will undoubtedly require that number of men to be in close touch at all times, so as to know the exact condition of these boilers. Mr. Townsend. The whole value of this matter will depend upon the ability of the inspector, will it not? Mr. Roe. To ascertain whether or not the boiler is in fit condition? Yes. Mr. Townsend. As I understand it, many of the carriers are per- fectly willing to submit to any reasonable rule as to inspection, and desire simply that the men who inspect or who investigate shall be competent and shall know what they are doing ? Mr. Roe. Yes, sir; that is, I believe, the sentiment that has been expressed here, and you understand that under this bill (H. R. 25924) the local inspector would only inspect a locomotive when in his judgment it was necessary to ascertain whether or not the report submitted by the common carrier for that particular locomotive was correct, whether or not the inspection had been made, and whether or not the repairs had been properly made; and in doing that I think that we would accomplish, or at least we hope that we would have accomplished, something in the right direction. Mr. Bartlett. Is there any fixed rule in the statutes about how frequently the steamboat boiler inspectors shall inspect? I have not looked at the statutes. Mr. Roe. In the bill? Mr. Bartlett. No ; I mean in the law ? Mr. Roe. In this bill ? Mr. Bartlett. No, no. There is a requirement as to the inspec- tion of steamboat boilers. Mr. Roe. I am not familiar with that law. Mr. Bartlett. There is another question I wai^ted to ask you about the details. Do you think it is necessary to have this inspector- general appointed by the President, by and with the consent of the Senate? Do you not think the Intel-state Commerce Commission or the Secretary of Commerce and Labor, or some other person, would be better able to judge of the qualifications than the President, who probably would have to refer the matter to some one ,else anyway ? 1446 BOILER INSPECTION. Mr. Roe. As far as I am individually concerned, I would say in regard to that, I ana not particular how it is carried out. It is a matter of detail that I am sure can be wisely left to the judgment of this committee and to Congress as to how these men should be appointed. I am not at all particular about that. Mr. Baetlett. You propose to permit the inspector-general, who has charge of all this, to be appointed by the President, oy and with the advice and consent of the Senate. To be sure, he is an inferior officer, but it looks to me as if there ought to be some head of a depart- ment or burfeau to appoint this inspector-general. You see, you permit the Interstate Cfommerce Commission to appoint the others, but require some further evidence of efficiency. In other words, it ought to be just like it might be a political appointment. That is what I mean. Mr. Roe. Yes. Well, I am sure, a>s I said before, that I am willing to leave that to the wisdom of Congress; but perhaps this bill was drawn to follow the precedents that had been established, and you also must take into consideration that the inspector-general in a department of that kind must be selected not only because of his knowledge of the technical work of construction and repair, and so forth, of boilers, but also with a view, I take it, to his ability to systematize and put in operation a great proposition of that kind. Mr. Bartlett. I understand; but you provide that he shall be appointed by the President, and the President has not time to attend to that personally, and probably will have to refer it to somebody. Mr. Roe. Yes. Now, Mr. Chairman, we have prepared and sub- mitted a statement showing the number of accidents as reported by the carriers to the Interstate Commerce Commission, and while they are appalling, yet they fail to include all of the accidents and casualties that are a direct result of a defective locomotive boiler. As a man who has had some fifteen years' experience as conductor and brakeman, I know that numerous accidents are occurring constantly because of defective boilers, which are reported under a different head entirely. Mr. Bartlett. May I ask you a question right there ? Suppose an engineer or fireman — the engineer has charge of the engine — says that the engine is not properly repaired, and he is directed to go on with it and he declines to do it, what happens then if he protests ? Of course, I know what the legal effect of that would be, but I want to know what happens ? Mr. Roe. The engineer must obey instructions. Mr. Bartlett. I know that. Mr. Roe. That is one of the first requisites of a railroad man, to obey instructions, and he is often told that if he thinks he is being injured he must go ahead and obey instructions and afterwards take the matter up. In the case of a defective boiler, he will sometimes go ahead and obey instructions and not live to have an opportunity to take the matter up in this world. Mr. Bartlett. For instance, when an engineer brings an engine in and calls attention to its defects — something has happened on the road^— and they inspect it and repair it, and turn it over to him to go out again, and he says: "This has not been properly inspected and it is not in proper condition to do the work you call on me to do," do they give him another engine, or require him to go out with that engine ? BOILER INSPECTION. 1447 Mr. Roe. No ; he would be required to go out ; and he would per- haps be told that if he did not want to take the engine out there would be another man who would do it; and so long as those were the conditions, he would feel compelled to take it out or resign his position. There may be extreme cases where that is not the rule, but I state the rule from my own observation. It is the rule that the engineer makes out the report in the book that is carried in the cab, but by going over those books as I have done for my own infor- mation, in many instances when the trafiic is heavy and the business is rushing and a lack of power is apparent, a very small per cent of this work which is outlined in the engineer's book is done. Mr. Wangek. Does it or does it not happen, where the engineman believes the boiler is in bad condition and his superior officer disa- grees with him, if the engineman earnestly reiterates his opinion of the unfitness of the boiler, that it leads to a change of opinion on the part of the superior? Mr. Rob. It might, sir, in some cases. As a rule, as a general thing, from my own personal observation, you understand, the engineer will not do that, unless he is positive in his own mind that the boiler is positively dangerous. It is not something that can be ascertained to an exactness. He does not know, and I take it no human mind knows, that the boiler will operate up to a certain hour or to a certain day without exploding or without ca,using accident; but he may in his own judgment think that the boiler is not safe. However, because of knowing the fact that it is not possible to ascer- tain just the breaking point and the time when it wul break, he may say, like the official, "Well, she may run another trip," and he will go out another trip. Mr. Bartlett. Take the risk ? Mr. Roe. Yes, sir. Mr. Wanger. Will you instance some cases of accidents resulting from defective boilers, in your judgment, which are not recorded or reported as such? Mr. Roe. Yes; I was just about to do that. Mr. Wanger. Very well. Mr. Roe. I can call to mind quite a number of specmc accidents, but in a general way is happens hke this. You have been told about the telltale hole in the stay bolt, and the fractured bolt and the escaping steam. That is something that is very frequently the case with a locomotive engine, especiaUy with a freight engine, and it is very seldom in my experience that during the cold wmter months we have an engine that is not leaking steam m that way at some place or at some time during the trip, and here is where the accident occurs, as I claim due directly to the defective boiler: The brakeman or the Vardmen working with this engine, depending upon the engineer to catch the signal just at the right time, just at the time that the signal should be given, by change of the wmd blowmg the steam so as to obscure the engineer's view, he does not receive the signal, and the consequence is that a drawhead is bursted m or a man is pinched or a car is sidesWiped, and all of those are reported as col- Fidons and corning a car, when as a matter of fact they are due directly to the defective condition of the boiler because the escaping steam obscures the view of the engineer and he fails to receive the signal. My experience leads me to believe that such an accident as the 1448 BOILER INSPECTION. result of a defective boiler very frequently occurs, and as I say, the reports show that it is due to the engineer not receiving the signal or the yardman or the brakeman failing to give the signal, or any one of a thousand other reasons are given as causing this collision, this destruction of property, or derailment of a car, and all those things that do not come under the head of locomotive boiler explosions, or defective locomotive boilers, under the present method of making reports. That, I think, is important. The Chairman. Is there anything else, Mx. Roe ? Mr. Roe. No, I believe not. We have a gentleman here, Mr. Hol- der, who wanted to address the committee on this subject. The Chairman. Very well. Is there anything else ? Mr. Faulkner. Do you want us to go on now, Mr. Chairman ? Of course, we have not had an opportunity of examining this last bill. We understand it was introduced yesterday, and we got a copy of it just now, and I would like to know what time the committee would want to give us this morning ? The Chairman. I do not see how it is practicable to give you anj time this morning. The House meets in a few minutes, and there is another matter before us here. I think we will have to let the com- mittee determine that later. They may want to hear General Uhler. They probably will at some later date. Mr. Faulkner. Mr. Chairman, we feel very anxious that you should allow us to meet some of the propositions that were made here by these parties, and also the general proposition, which is a very important one to the people. The American Railway Mechanical Association, which is a part of the American Railway Association, has been working on rules and regulations governing the inspection of boilers. I am sorry to say that I am afraid they will not be able to finish those regulations by the time that the association will meet to-morrow. They have been working all spring, I think, with the purpose of getting them before the association that meets to-morrow, and we are very anxious that nothing shall be done in this matter nntil we get a basis upon which legislation can rest with absolute safety and security to all parties. We believe that the introduction of these bills has been most advantageous to all parties in interest. It has directed more actively the minds of the authorities of the railroads to this question, and they have gone to work through these technical men to formulate such accurate rules as would be the basis of a proper legislative enactment which Congress might find it necessary, when these rules are formu- lated, to adopt and make a part of the statute. To leave this wide open without any basis upon which to rest it, and leave it open to the general views of inspectors, we think would be detrimental both to the public and to the railroads, because the eflficiency of these engines is one of the most essential features, of course, to the railroads themselves. Their whole trafl&c must depend upon the efficiency of their motive power, and they have been exceedingly careful, therefore, in all of the inspections of the past as well as they are at the present time, and will be in the future. We look upon this matter as a matter of absolute vital interest to the road itself, to have those engines in the most perfect condition, and in looking over the data of explosions of boilers we find that the condition of the engine, so far as inspection by the railroad is concerned, has been proved by BOILEE INSPECTION. 1449 investigation to be simply marvelous. We find that there has not been m all the explosions The Chairman. Well, Senator, excuse me. Mr. Faulkner. Excuse me. The Chairman. You are not prepared to go ahead this morning now, and we are not prepared to hear you. Mr. Faulkner. No, sir; we are not prepared. The Chairman. The committee will determine later whether they will have further hearings on the subject. Mr. Faulkner. Well, I sincerely hope that the committee will give us an opportunity to be heard. We are willing to come here at any time. Some of our men could not come here, because they were at the convention of this very association, attending to this very matter. So that with the understanding, Mr. Chairman, that you wUl certainly give us an opportunity to be heard, I will say nothing further. The Chairman. The committee will determine that. Mr. Faltlkner. We of course will have to appeal to the committee. We will obey the committee. Whenever they want us, we will be here. Washington, D. C, May 17, 1910. Hon. James R. Mann, Chairman CoTnmittee Interstate and Foreign Commerce, House of Representatives, Washington, D. C. Dear Sir: In connection with the four reasons assigned by the committee of the International Master Boiler Makers' Association in regard to boiler explosions, the writer omitted to state that out of a membership of about 500 the majority of the mem- bers are railway foremen boiler makers. The committee, except one, which conducted the research are railway foremen boiler makers. The point I wish to make is this: This committee made a public statement as to the causes of boiler explosions and gave four reasons. They did not say that 98.7 per cent of boiler explosions are due to the indiHerence of the locomotive engineer. The official of the Santa Fe Railway would lead one to believe that the reports for about five years were carefully gone over from 134 railroads, and the result of the research brought out that the engineers were the parties to blame for boiler explosions. As the members of the above-named associations are employed by more or less of the 134 railroads, and they do not support the statement of the Santa Fe official, it follows that said official has been deceived, and this illustrates the very point that I and others have made, to wit, the middle, or "petty oflacials, " are ones that doctor the reports; also are the ones that order locomotives to be used when the boilers are in an unfit condition. The foremen boiler makers do their part, and if their reports without change reached the main officials of the railroads I am satisfied things would be different. These men receive rosy, false, and misleading statements and, of course, in view of these reports come to Washington to defeat a bill that means more to them than they realize. The foremen boiler makers, who do the inspecting or supervise the inspection, do not support the statement made by the Santa Fe official. Had the Santa Fe official known that many, perhaps all, of the foremen boiler makers of the 134 railroads he included in his statement knew and expressed them- selves differently, he would have looked into the matter more thoroughly and, doubt- less, would have changed his opinion considerably. Please have this placed on record, printed hearings. Yours, truly, H. S. Jefpbky. 1450 BOILER INSPECTION. STATEMENT OF ARTHUR E. HOLDER, LEGISLATIVE COMMITTEE AMERICAN FEDERATION OF LABOR. Mr. Holder. Mr.. Chairman and gentlemen of the committee, for the sake of the record, permit me to say that I reside in Washington, D. C, and represent the Ameri- can Federation of Labor, as part of its legislative committee. I am a machinist by trade, and as such have had thirty years' practical shop experience. Sixteen years of that period have been spent building and repairing locomotives, and for four years I was factory inspector of the State of Iowa. In the public interest, as well as the direct representative of many thousands of citizens engaged in the manufacture, repair, and upkeep of locomotives, I ask that your honorable committee give favorable consideration to the principles contained in the "boiler inspection" bill, introduced in the Senate by Senator Burkett, and known as "S. 6702," and I urge you to recommend to the Congress the enactment of legislation that will safeguard the lives and limbs of men employed by railroad com- panies. The risks they have to assume in their occupations are altogether too numer- ous for them to be unnecessarily exposed to dangers that should and can be avoided. Boiler explosions can be prevented; they are not a necessary evil to the successful operation of a railroad. The boiler of a locomotive is, to use a metaphor, the heart of a railroad. It is the most vital of all the mechanical instruments employed, and it is the most abused. The Federal Government should extend its police power in the interest of public poUcy and the general welfare, and establish a bureau of competent locomotive-boiler inspectors, in order that fire-box sheets, boiler tubes, stay bolts, crown bars, boiler braces, and boiler rivets may be properly tested and a standard fixed. The material that is used for these purposes on locomotive boilers if subjected to the average test made by the Steamboat-Inspection Service would in many cases be rejected. Quality is being sacrificed to cheapness, and this general system, which has a tend- ency to inefficiency and deterioration, also applies in the shops and roundhouses of the railroads where quality of work is sacrificed to quantity. The general slogan by master mechanics and roundhouse foremen has become notorious, and on every hand is heard these expressions, "That's good enough," "Oh, let it go," "Hurry up, get her out, ' ' and when such orders are given to a workman by one in authority they have to be obeyed, even if the property of the railroad is thereby endangered and the lives of the public and the workers unduly exposed. Federal boiler inspection would correct this. The moral effect would be worth millions of dollars to the investing public, and its influence would save untold misery and poverty in hundreds of humble homes. Locomotive boilers are frequently run beyond their capacity, and no class of mechanics know that better than the machinist. Locomotive boilers are neglected when they should be cared for, and instead of encouraging the mechanics who repair them and the laborers who clean them the reverse is usually true. In fact, it has become a byword among machinists that the newer the arrivals from Castle Garden the more acceptable they are for roundhouse men. They are in too many cases the care takers of the locomotive boilers. Fire-box sheets are subject to intense abuses during manufacture and repair. Rivet and stay bolt holes are punched instead of drilled; this practice unduly crystallizes the material and subjects the sdheets to aunnatural strains, so much so in fact that I have frequently seen new sheets after being so abused crack their whole length, sometimes vertically, other times horizontally or diagonally. Then these cracks are plugged, and I have personally plugged sheets with as many as 30 continuous plugs at a time, "in order to get her out," as the foreman would order, both of us knowing full well that such malpractice in mechanics was a standing invitation to worse and more serious troubles. The condition of internal boiler braces is too commonly ignored, and crown bars are allowed to collect unreasonable quantities of scale and other sediment. Federal boiler inspection would remedy these invitations to disaster, and the lives of the loco- motive engineers, firemen, brakemen, and others whose duties it is to work in the cab, would be conserved, and the blame finally located for faulty boilers where it commonly and properly belongs, viz, on the heads of aspiring officials in shops and roundhouses. It is the essence of cruelty to blame an engineer for an explosion and ascribe it to "low water," in order to shirk responsibility. It is equivalent' to manslaughter to send a crew out with a boiler that should be cared for, especially when the person in authority knows full well that the boiler is "in bad order," but for ambition's sake wants to get "another trip out of her." Federal boiler inspection would be an avenue for employees to make honest reports without fear of losing their jobs, and it would work for the safety of the employees BOILER INSPECTION. 1451 SweK'ia^/^'n;ri!l!r*^°?- Tlie preBent insidious system of intimidation of HrSg tL pfopk P^ '' °''" °* '^' '"°^*' " "°' *^« '"°«*' ««™"« danger l.„?'ir *n® ®™P^y?es an opportunity to tell the truth; they will not abuse this rieht but It will react with untold benefit to themselves, the investors, and the nation^ ' LIST OF STATES HAVING LAWS RELATING TO THE INSPECTION OF STEAM BOILERS. ^ol°'^