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porate operation of vessels on the State canals. Individuals and corporations are loath to embark in the business of transportation in competition with the United States Government and instead of extending the powers of the Interstate Commerce Commission over the New York canals, commercial interests in New York and the superintendent of public works favor the relinquishment by the Federal Government of the operation of Government-owned vessels on the canals of that State.

The Esch-Pomerene bill, if enacted into law, will greatly extend the powers of the Interstate Commerce Commission. As already stated, the original act did not apply to intrastate commerce, except to prevent unjust discrimination by State authorities as to interstate commerce. (Houston E. & W. T. R. Co. v. U. S., 234 U. S.,

342.)

Under this act undue discrimination between localities in different States by unreasonable difference between intrastate commerce and legal interstate rates by the reduction of the former by the acts and officers of a State may be prevented by the Interstate Commerce Commission. (Shepard v. Northern Pac. Ry. Co., 184 Fed. Rep., 765; decree modified by Simpson v. Shepard, 230 U. S., 352.)

Congress has not taken over State terminals so as to render invalid a State law requiring an interchange of business at a State terminal. (Vandalia R. Co. v. Public Service Com. (Ind.), 106, N. E. Rep., 371.)

The phrase to wit, “ Under common control, management, or arrangement for a continuous carriage or shipment” is considered in Cincinnati, etc., v. Interstate C. c.°(162 U. S., 184), and also Interstate C. c. v. Detroit, etc. (167 U. S., 633). Railroads sharing in an agreed rate on traffic, though intrastate, come under the foregoing phrase. The term common carrier in the interstate-commerce act does not include a water carrier, except it be ferries and ships used in connection with railroads.

It is generally conceded that the Esch-Pomerene bill, if enacted ; into law, will supersede some provisions of the shipping act, that being chapter 451 of the acts of Congress approved September 7, 1916, and it may authorize the Interstate Commerce Commission to impose regulations in conflict with the provisions of the navigation laws of the United States. However that may be, water carriers from port to port are unwilling to be subjected to the provisions of the bill under consideration, which may, if enacted into law, permit the Interstate Commerce Commission to make orders (u) to regulate and control port to port interstate water rates; (b) to prescribe minimum rates; (c) to compel water carriers to publish their rates in tariff form and file such tariffs with the commission; (d) to compel water carriers to observe any rule or form prescribed by the commission for the keeping of accounts and records and of receipts and disbursements; (e) to establish purely intrastate rates when the relationship of the inter and intra state rate is at issue.

Furthermore, section 13 of the proposed bill seems to authorizethe Interstate Commerce Commission to confer with the authorities of any State having regulatory jurisdiction over the class of persons and corporations subject to said act with respect to the relationship between rate structures and practices of carriers subject to the jurisdiction of State bodies and of

the commission, and to that end is authorized and empowered, under the rules to be prescribed by it, and which may be modified from time to time, to hold joint hearings with any such State regulating bodies on any matters wherein the commission is empowered to act and where the rate-making authority of the State is or may be affected by the action taken by the commission.

You will observe, on page 13, that the act authorizes the Interstate Commerce Commission to forbid and declare to be unlawful any undue preference or prejudice as between persons or localities in State and interstate and foreign commerce.

Mr. SANDERS of Indiana. You say forbid further traffic?
Mr. Hill. Yes; on page 21.
Mr. SANDERS of Indiana. What language is that?
Mr. Hill. Page 21, the latter part.
Mr. MERRITT. That deals with the rates and not with the traffic.

Mr. HILL. Let me state just one thing more. The bill provides that it shall not apply to the commerce wholly within a State, except as may be done under section 13.

Mr. SANDERS of Indiana. I was inquiring as to your language when you stated they had the power to forbid the traffic.

Mr. Hill. I will have to elucidate that. I have forgotten the section, but one section of the bill provides that it shall not apply to commerce within a State except as otherwise prescribed in section 13. Then section 13 prescribes what may be done and what the Interstate Commerce Commission may do.

Mr. SANDERS of Indiana. That is to regulate the traffic, but not to forbid it.

Mr. Hill. No; not to forbid it. I think, perhaps I was inapt in my expression, I ought to have said, it may forbid'the preference.

Upon the complaint of any shipper, whereinthere is brought in issue the lawfulness of any rate, fare, charge, classification, regulation, or practice made or imposed by authority of any State, the commission, before proceeding to hear and dispose of such issue, shall cause such State or States to be notified of the proceeding.

This language seems to authorize the Interstate Commerce Commission to entertain jurisdiction of such matters, though they be wholly intrastate, notwithstanding the express language of the act found in the proviso on page 2, reading, so far as is pertinent to this question, as follows:

That the provisions of this act, except as expressly provided in section 13 thereof, 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.

Though the courts ultimately were to hold that the proposed amendments did not extend the jurisdiction of the Interstate Commerce Commission to water carriers operating wholly within a State, the possibility that the commission might exercise such jurisdiction on the ground that the intrastate rate affected the rate on interstate commerce of itself might deter shippers from using our canals and interior waterways, as they ought to be used. There may be some disposition on the part of those who administer the law to so extend the jurisdiction of the commission upon the complaint of a shipper or of a carrier, and if the commission were to undertake to regulate rates the intrastate transportation of interstate tonnage, it would be a burden to the carriers, who would be required to file schedules of rates, that are constantly fluctuating. That is due to the nature of the traffic over waterways and the competition there is to secure such traffic. It is impracticable to undertake to regulate intrastate rates, even though they be a basis for interstate rates. They ought to be free from any control, for they are the basis or fundamental conditions, which determine other rates, as the Interstate Commerce Commission in the past has recognized. Nature has provided waterways, which are highways, and ought ever to remain untrammeled. Artificial waterways have been constructed to connect natural waterways and therefore they ought to be free and untrammeled. The State of New York by an amendment to its constitution in 1882 provided that the canals of the State should be free of tolls, and ever since that time they have been free of tolls and open to the public.

Judge MacLean has called attention to what New York has dono in constructing its artificial waterways from the Great Lakes to the Hudson River. The State did this on its own initiative, after the Government of the United States had repeatedly declined to aid or cooperate in their construction. Before the original Erie Canal was built in the years 1817-1825, application was made to the Federal Government for aid, but it was refused, and not since that time has the Federal Government contributed anything toward the construction, improvement, or operation of the New York canals, except during the recent war, when it undertook to operate in a small way barges thereon, which has not been entirely successful nor satisfactory.

At an expense of $154,800,000, for which some State bonds have been issued, the State of New York has constructed the best canal system in the world. Its terminals are being constructed all through the State. A distinguished engineer in Berlin in 1905 conceded that the New York barge canals, then projected, were the best in the world.

Mr. DENISON. You will except the Panama Canal, will you not?

Mr. Hill. No; I will not except the Panama Canal. That is a canal between two oceans, connecting those oceans through a body of natural water, extending two-thirds of the distance between the two oceans. All that was necessary to do was to connect up the two oceans with the natural body of water at the divide to make the canal effective for ocean-going vessels. New York has built canals from the Great Lakes to the sea through cities, towns, and villages and through all kinds of soils and various geological formation, which canals are adequate to transport vast quantities of tonnage between the Great Lakes and the ocean. The New York barge canal system did not cost as much as the Panama Canal and in some respects the Panama Canal is physically greater in that it permits the passage of vessels of 30-feet draft, whereas the New York barge canals admit of the passage of vessels of less than 12-feet draft. The amount of excavation, however, the engineering problems involved, the impounding of great bodies of water like the Deltà reservoir, having a capacity of two and three-fourths billions cubic feet, and the Hinkley reservoir having a capacity of three and four-tenths billions cubic feet, the canalizing of the Hudson, Seneca, Mohawk, Oswego, and other rivers, and the construction of locks 328 feet long, 45 feet wide, and 12 feet deep over miter sills, one of which locks has a lift of 401 feet, namely, that at Little Falls, and other large works, such as the movable dams across the Mohawk and the concrete dams at various parts of the rivers canalized and the installation of hydraulic generators and other problems involved, made the construction of the barge canals of New York one of the colossal undertakings of the twentieth century.

New York realized its opportunity to connect the Great Lakes with the sea by the construction of its great waterways between them, and it did so entirely at its own expense, amounting to $154,800,000, as the initial investment, but which require an annual expenditure of five to eight millions for their upkeep, and they are entirely free.

Mr. HAMILTON. Do you say that a private individual or a corporation has the right to operate boats over the Erie Canal without a permit or charter or license?

Mr. Hill. All boats can operate as freely as though they were owned by New Yorkers, permits being freely given by the superintendent of public works, except if they go outside of the State of New York they are licensed.

Mr. CLEARY. May I make a little correction? No canal boats that do not go out of the jurisdiction of the State are licensed. It is only those that go to another jurisdiction.

Mr. HAMILTON. I was surprised at the freedom with which it can be used.

Mr. Hill. Permits or something of that sort are granted by the superintendent of public works, but anyone can operate a fleet of vessels on the canals as freely as though they were residents of the State. We have a superintendent of public works, whose functions are to supervise the State canals and the operation of vessels thereon. He expected to be here and to present his views in opposition to the pending bill. I understand that he has forwarded a letter in which he voices his opposition and that of the State of New York to extending the jurisdiction of the Interstate Commerce Commission over the New York canals.

The CHAIRMAN. Do you refer to the letter of Mr. Walsh transmitted by the governor of New York five or six weeks ago ?

Mr. HILL. There was to be another letter here to-day. It may not have arrived.

The CHAIRMAN. It has not arrived yet.

Mr. Hill. We hope it will reach you in time so that it may be considered.

The point we want to make is this: Judge MacLean has well stated that that great trunk line of waterways through this State was built primarily to regulate freight rates. It does not require any argument, gentlemen, to convince you that water carriage is cheaper, inherently so, than rail carriage. The people of New York understood that to be the case and put their money into the project with the understanding that whatever rates they might be able to obtain from port to port within the State and from ports along the Atlantic seaboard and from ports along the Great Lakes to ports within the State of New York were rightfully theirs and they would never be subject to regulation by the Interstate Commerce Commission or by any other commission, because such rates were for water carriers operating entirely on natural lakes, rivers, ocean, and artificial waterways, owned by the people and made free by constitutional proThe CHAIRMAN (interposing). Would that be your contention where the intrastate rates cast an undue burden upon interstate rates, so that the general commerce of the country would have to make good a deficiency resulting from low intrastate rates?

Mr. Hull. If that were possible, I suppose we should assent to such regulation. The CHAIRMAN. It is not only possible, it has happened.

Mr. Hill. The fact is, Mr. Chairman, that after Federal control ceases rates over the Erie Canal and over the New York canal system are likely to be so low as not to be a burden to interstate commerce. That condition is not likely to arise, but if it were to arise, the same may be regulated by the public service commission of the State, of which I will speak later.

It is very difficult to prescribe rates for the transportation of tonnage such as cement from New York, or New Jersey to Syracuse, for the rate on such tonnage is lower than may be the rate on tonnage moving in the opposite direction, because vessels are willing to take such cargoes on their return from tidewater to Buffalo, where they are to receive their cargoes of grain for eastern ports. Such rates on westbound traffic are necessarily lower than they are on east-bound traffic and are subject to such competition that they are changing from week to week.

If this bill were to pass and it became necessary to file a schedule of rates, those would, of course, predominate and control absolutely the local rates. Although there might not be any complaint under section 13, there is always the danger that some one will raise the question and bring the matter before the Interstate Commerce Commission, and then there must be a hearing with the State Commission and others interested and thereafter the Interstate Commerce Commission may act as authorized by the proposed amendment to section 13 of the interstate-commerce law.

In New York we have a public service commission empowered to act on intrastate matters very much as the Interstate Commerce Commission may act on interstate commerce. Chapter 805 of the laws of 1917 confers that authority upon the Public Service Commission of · New York. The act is a lengthy one and must be examined to understand all its provisions, but it is adequate to meet all questions growing out of the carriage of intrastate commerce by rail and water lines, acting as common carriers, but not when carried by water carriers from port to port. That service is and always has been free from all regulation.

I suggest that the pending bill be so amended as not to confer jurisdiction upon the Interstate Commerce Commission to exercise any control or to have any power to regulate rates for the transportation of tonnage over the canals and other interior waterways of New York.

Mr. Sweet. Have you any suggestion to make by way of amendment?

Mr. Hill. I have not at present, but will be pleased to submit such an amendment in the near future.

The builders of New York waterways, who have gone to the expense of constructing them, ask that they be left free, as they have been made free by an amendment to the State constitution, so that any shipper, whether he be a resident or a nonresident of New

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