it undertakes to prescribe rates not to be exceeded by the carrier, it must do so with reference exclusively to what is just and reasonable, as between the carrier and the public, in respect of domestic business.

The argument that a railroad line is an entirety; that its income goes into, and its expenses are provided for out of, a common fund; and that its capitalization is on its entire line, within and without the State, can have no application where the State is without authority over rates on the entire line, and can only deal with local rates and make such regulations as are necessary to give just compensation on local business.

The CHAIRMAN. The time has arrived for an executive session of the committee, and we shall have to allow you an opportunity to complete your argument at the next meeting.

Hon. STEPHEN B. ELKINS, Washington.

FORT WORTH, TEX., February 7, 1905.

DEAR SENATOR: I inclose you my objection to the Esch-Townsend bill. I hope you can place it before the whole committee and have it printed. The people will not stand for any such makeshift. I do hope that no bill will be passed if this is the best they can do.

With great respect,

S. H. COWAN.

Hon. STEPHEN B. ELKINS,

Chairman, Washington, D. C.

FORT WORTH, TEX., February 7, 1905.

MY DEAR SENATOR: I take this method of indicating to you and to the Senate Committee on Interstate Commerce certain specific objections to House bill 18588, reported by the House Committee on Interstate and Foreign Commerce to the House of Representatives, and which will be passed undoubtedly before this letter reaches you. These objections will undoubtedly occur to any lawyer familiar with the subject-matter.

Section 1. The following words in lines 3 and 4 should be stricken out, viz, "upon complaint duly made under section 13 of the act to regulate commerce,' so that the Commission may be left free to make an order upon any investigation, whether upon complaint of the shipper or where the investigation is instituted by the Commission. In line 6, after the word "rate" and before the word "for," the following should be inserted, viz, "or any part thereof"; so that if the Commission shall be investigating the rates of freight which apply on interstate commerce where it moves on local rates it may determine what each carrier is entitled to considering the shipment as a through shipment. For example, the Texas and Pacific Railway Company canceled out its interstate rate on live stock and now carries upon the local rates all interstate freight up to junction joints of other lines, and the result is that neither state law nor the interstate commerce act applies to such traffic. Furthermore, there are numerous instances where systems of railroad in order to secure the whole freight compel the shipper to use a circuitous route instead of being diverted at junction points over the short line at the through rate. They compel these circuitous shipments by simply declining to publish through rates from points on their lines via junctions and over the short-line route. This may not be very important with ordinary freight, but it is very important with all perishable freight and live stock. Undoubtedly the Commission ought to have authority to give the shipper the right of through rate and through route via the shortest line that is practicable. In line 9 of section 1 the Commission is limited in fixing the rates for substitution to those which are "unreasonable or unjustly discriminatory. If the words 'unjustly discriminatory" include undue preferences and advantages, as prohibited in the third section of the act to regulate commerce, then I have no objection to the expression used, but since sections 2 and 4 prohibit unjust discrimination, it seems to me that the language is subject to the construction that the rate or advantage which is unduly preferential is not embraced within the meaning of the term "unjustly discriminatory," and it certainly can be made much plainer by striking out the words " unreasonable or unjustly discriminatory" and insert in lieu thereof the words, viz, "in violation of any of the provisions of the said act to regulate commerce or acts amendatory thereof and supplemental thereto." This should be done in order that the Commission may substitute the rate which is in violation of any of the provisions of the acts which it is called upon to enforce.

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In line 13 of section 1, page 1, and line 1, section 1, page 2, strike out the words, viz, “unreasonable or unjustly discriminatory," and substitute therefor the word "unlawful."

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In lines 2, 3, and 4, section 1, page 2, the order of the Commission is made operative thirty days after notice to the persons directly affected thereby. I can not see why this language is used. The fact is, every shipper and every railroad which might participate in the exchange of freight and in the divisions of rates might be affected directly in very numerous ways. If notice must be given to every person or persons directly affected it might be that the Commission's order would not take effect. It seems to me, therefore, that the plain and sensible provision to be substituted would be to strike out the words in lines 3 and 4, viz, person or persons directly affected thereby," and insert in lieu thereof the words, viz, "the carrier or carriers against whom such order of the Commission may be directed." Lines 4 to 10, inclusive, section 1, page 2, which provide for the institution of proceedings for review of the Commission's order, in my opinion to a large degree destroy the usefulness of the whole enactment. It is inconsistent with the theory and purpose of the act, which gives the Commission the legislative power to fix rates, to have the action of the Commission "reviewed" by a court. That word will undoubtedly be given its legal meaning. It is defined as follows:

*

* *

"A review is a second examination with a view to amendment, reconsideration, revision. The term is used more particularly to designate the examination of a case by an appellate court It signifies any of the different modes by which a judicial act may be revised, as by appeal, writ of error, rehearing," etc. (24 A. E. Ency. of Law, 937.)

Webster defines the meaning in law to be-"A judicial examination of a proceeding of a lower court by a higher."

Now, if the words "justness or reasonableness" in line 9 were eliminated, then the provision might not be so objectionable, but under the provisions of this section of the bill as it stands not only will the court determine whether the Commission has acted in a lawful manner and in conformity to the Constitution and statute under which it acts, but the absolute right is given to the carrier to have the court review the Commission's decision with respect to every matter which the Commission could possibly consider by requiring it of the court to determine the justness and reasonableness of the Commission's order. Nor can the court substitute its judgment for that of the Commission, because it does not comport with the spirit of the Constitution that Congress may confer upon the court the power to fix a rate for the future.

No one contends that it can be done. I therefore hold to the opinion that unless the words "justness and reasonableness" are stricken out of line 9, section 1, page 2, the whole section is a mere delusion in so far as it attempts to have a rate fixed and to become speedily effective. It would be a somewhat different thing if the court were merely given the power without imposing on it the duty, or conferring upon the affected carriers the right to require of the court that it shall pass upon the justness and reasonableness of any order of the Commission; for in such event the court would not be compelled to pass upon those questions. They are undoubtedly questions of fact or judgment, and as the Supreme Court has frequently decided, the Commission is more competent to exercise its judgment in determining questions as to what the rate of freight ought to be than is the court, and its judgment ought to be left to stand if it has conformed to the law, and if the rate fixed does not violate some legal or constitutional right or power.

The court can pass on these questions without undertaking to determine what the rate ought to be. If the Commission is to determine what the rate ought to be, what good reason exists for substituting the judgment of the court, less competent to determine the fact than is the Commission. There would be just as much reason to have an additional Commission to determine it as to have a court do so. If the court shall be of a different opinion to the Commission and think that the rate fixed by the Commission is not a correct one, it may by its judgment destroy the legislative act of the Commission, yet it can not substitute anything in its place.

The whole matter with respect to this section of the bill, when taken in connection with the powers conferred upon the court of transportation, may be summed up by the statement that while the people have asked for bread they have been given a stone.

Section 2: The words in lines 18, 19, 20, and 21 after the word "order" in line 18, should be stricken out as being useless, for the reason that if the Commission's supplemental order becomes a part of the original, these words are surplusage at least and might be given the construction that a separate proceeding might be instituted to set aside the supplemental order.

Section 3: In lines 9, 10, and 11 provision is made to file the record with the court of transportation ten days after notice, but it does not specify what notice nor by whom to be given, nor is there any provision in any other part of the act that applies to it. This is insignificant, but should be corrected.

The last paragraph of this section, lines 16 to 20, gives the Commission the power to amend its orders, etc., even while the case is pending before the court for a judicial review. The use of the words "a judicial review" furthermore gives force to the objections which I have made above to section 1, and makes it manifest that there is to be a judicial review of the facts upon which the legislative act is to be determined, and the incongruous provision is made that while the court has full jurisdiction, the Commission may nevertheless annul its former order or modify the same. Surely no such double jurisdiction is feasible, and there should be added at the end of section 3 the following proviso:

"Provided, That if, pending any proceeding in any court to enforce or to annul or modify or otherwise affect any order of the Commission, the Commission shall determine to reopen its investigation or proceeding for the purpose of modifying, amending, or annulling the order, ruling, or requirement concerning which proceedings may be pending in such court, it shall be the duty of the Commission to give notice of such intention to the court before which such proceedings may be pending, and thereupon the jurisdiction of the court shall be suspended and the record referred back to the Commission for its further order, ruling, or requirement."

The words "such proceeding for review" in line 4, section 3, page 3, and in line 12, section 3, page 3, should be stricken out and have substituted therefor the words, viz, "proceedings to set aside or annul any order, ruling, or requirement of the Commission." This upon the theory that a review in the nature of things is entirely inappropriate.

Section 4. There should be added to section 4 the following proviso:

"Provided, That if any carrier against whom an order, ruling, or requirement of the Commission may be made, shall file any suit or proceeding to set aside or annul such order, ruling, or requirement, the Commission may at the same time the defendant answers, file a cross bill for the enforcement of such order, ruling, or requirement, and proceedings thereon had in the same manner as if the Commission should apply by original petition to enforce obedience to its orders."

This proviso should be added for the manifest reason that it would prevent a multiplicity of suits. And the further proviso should be made, viz:

"Provided also, That where the Commission shall institute any proceeding to enforce obedience to its orders, ruling, or requirement, any carrier, party to such proceeding, may file its crossbill seeking to annul or set aside the Commission's order, ruling, or requirement, but failing to do so shall not thereafter be permitted to maintain any such suit or proceeding to set aside or annul any order, ruling, or requirement of the Commission.”

This proviso should be inserted for the manifest reason that when the court acquires jurisdiction of the subject-matter of the Commission's order, the litigation should be complete and confined to that particular proceeding. Were it not true that this bill has provided a new and special sort of court with special jurisdiction, it might be assumed that the court would adopt rules which would require all of the matters to be litigated in one action, where either the Commission or the carrier first instituted it, but evidently the court would not be compelled to adopt any such rule and, as dispatch is essential, this proviso should be inserted.

Section 7: The establishment of the court by appointment from the circuit court judges of the United States seems entirely unnecessary. Undoubtedly three judges for the court of transportation are amply sufficient. The existing circuit court judges have been appointed with a view to their places of residence and because they have sought the specific appointment, under existing laws at the time they were appointed. It is by no means certain that they can be compelled to act as a court of transportation. Possibly only those who might consent to act would accept the appointment. There is no use whatever of disturbing the present circuit courts in attempting to add to the duties of the judges that of judges of the court of transportation. It is an unprecedented sort of thing. It limits the sphere from which the President may select the judges of the court of transportation. It looks to me that it questions his ability to make proper selection and compels him to make the selection from judges who have been appointed by other persons and for a different sort of service.

Mr. Townsend's original bill establishing an interstate commerce court did not contain any such complicated, uncertain, and limited means of providing judges for this That bill, it was generally understood, voiced the sentiments of the President upon the subject. Mr. Hepburn's bill, which was defeated in the committee, pro

court.

vided this method of selecting the judges for the court of transportation. It is not at all probable that there is any economy to grow out of this method of appointment and it would seem better and comport with the spirit of our laws that the President appoint the judges of the transportation court without limitation as to the source from which such appointment should be made. The public can scarcely see why this method has been seized upon.

Sections 8 and 9. If section 7 should be changed to conform to the above views, then sections 8 and 9 should be eliminated, and substitute therefor appropriate provision for the sessions of the court of transportation.

Section 10. To section 10, page 6, at the end thereof, should be added the following proviso:

Provided, That any suit at law which may be brought by any party in whose behalf reparation shall have been ordered by the Commission, may be brought either before the court of transportation or before any circuit court of the United States having jurisdiction thereof, as is now provided by section 16 of the act to regulate commerce."

Section 12. Strike out all after the word "controversy" in lines 14, 15, 16, 17, and 18, and insert in lieu thereof the following proviso:

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Provided, That if it shall be made to appear to the court of transportation that there exists newly discovered evidence which could not with due and reasonable diligence have been known to the parties at the time of the hearing before the Commission, and that such testimony shall be of such character that the court of transportation may be of the opinion that it would or might change the result of the Commission's order, ruling or requirement under investigation, the court of transportation shall, in such case, refer the case back to the Commission in order that the testimony may be presented to the Commission, and that it may act upon the whole case in view of all of the testimony, but the court of transportation shall not consider any other testimony or facts than that which shall have been presented to the Commission."

The reason for inserting this proviso is manifest—that is, that the court should only pass upon the case which the Commission heard and tried. Any other sort of arrangement makes it a trial court, and it is but the prolonging of proceedings, and at last deprives the shipper of any reasonable and speedy relief. Those who have practiced before the Commission in such cases know how easy it would be to thus introduce new testimony, which could be said not to be known at the time of the hearing before the Commission. I undertake to say that the evidence bearing upon the reasonableness of a rate is practically without limit in its scope, and the facilities and opportunities for making a different case before the transportation court than that made before the Commission would exist in practically every case.

Section 14. This section seems to give to the court of transportation an absolutely free hand in the granting of all sorts of restraining orders, but leaves it so any injunction or restraining order may be continued in effect on appeal, and opens the way and furnishes the opportunity to and indeed the invitation to the carriers to procure injunctions and restraining orders in every case which may be decided by the Commission. It is therefore imperative, in my opinion, if this section is to stand in its present form, that there be added to it the proviso, viz:

"Provided, That the court of transportation shall not grant any temporary injunctions or restraining orders suspending any order, ruling, or requirement of the Commission, except where it is clearly and satisfactorily shown that the order, ruling, or requirement of the Commission in question is erroneous and in violation of the law or some constitutional right, and such restraining order shall not remain in effect longer than thirty days within which a final hearing shall be had upon any petition in which any temporary restraining order or injunction shall be granted as against the order, ruling, or requirement of the Commission."

Unless some such proviso is added to section 14 it would be found that every order of the Commission is hung up by temporary restraining order and every sort of delay which can be practiced in court.

Section 15. There should be added to section 15 the following proviso:

"Provided, That where the court of transportation shall upon any hearing before it brought either by the Commission or the carrriers, suspend the order, ruling, or requirement of the Commission, and an appeal shall be taken from the judgment or decree of the court of transportation, such appeal shall not in such case suspend the order of the Commission, but the same and the decree of the court of transportation shall remain and be effective pending such appeal."

Surely after the Commission has fixed a rate, and after the court of transportation has issued its order enforcing the same or refusing to grant any injunction restraining the enforcement of the order of the Commission, the shipper is entitled to have such

rate so fixed by the Commission and sustained by the court of transportation put into effect.

The whole spirit of sections 14 and 15 of this bill seems to lose sight of the fact that the shipper has any rights whatever. Every possible right of the railroad is protected. More extensive remedies are given against the legislative act of fixing a rate than has ever been attempted under any other form of remedy or relief. Yet the shipper is bound by what the Commission does, while the railroad is given the opportunity to practically destroy all the benefit which the shipper can gain from the Commission's act by this cumbersome method of so-called review, retrial and appeal, during all of which time the shipper must continue to pay the unlawful exaction and the railroad is provided with every means of pocketing the money. It seems that in the attempt to be fair the benefits which are apparently conferred by the bill are in effect destroyed by these extensive powers of the court of transportation and the provisions which make it as easy for the railroads to circumvent for an unreasonable length of time, if not entirely, what the Commission may have done. To pass such a bill and make it a law is simply providing a halfway measure, a mere makeshift.

Respectfully submitted.

S. H. COWAN, Attorney for Western Cattle Interests.

SENATE COMMITTEE ON INTERSTATE COMMERCE,
Saturday, February 11, 1905.

STATEMENT OF DANIEL DAVENPORT-Continued.

The CHAIRMAN. You may resume, if you please, Mr. Davenport. Senator FOSTER. Mr. Chairman, there are some questions I should like to ask Mr. Davenport.

Mr. Davenport, would you prefer to wait until you get through before answering these questions?

Mr. DAVENPORT. You mean questions pertaining to what I have said?

Senator FOSTER. Yes, sir.

Mr. DAVENPORT. No; I should be pleased to answer them now, to the best of my ability.

Senator FOSTER. You admit, Mr. Davenport, that Congress has the right to fix rates for railroads engaged in interstate commerce, do you

not?

Mr. DAVENPORT. Yes, sir; with the limitations I have stated.

Senator FOSTER. But you contend that Congress in the exercise of that power is under certain constitutional limitations and restrictions? Mr. DAVENPORT. Yes, sir.

Senator FOSTER. For instance, Congress could not establish any confiscatory rates by which the property of railroad companies would be taken without due process of law.

Mr. DAVENPORT. I assent to that.

Senator FOSTER. Section 9 of Article I of the Constitution reads as follows:

No preference shall be given by any regulation of commerce or revenue to the ports of one State over those of another; nor shall vessels bound to or from one State be obliged to enter, clear, or pay duties in another.

I understand that you contend that this is also a limitation placed upon Congress so far as concerns establishing rates between the different ports of the country?

Mr. DAVENPORT. Yes, sir.

Senator FOSTER. And that should Congress give any preference to one port over another situated in a different State it would then be exceeding its constitutional powers?