Mr. BACON. That is it exactly.

Mr. RICHARDSON. But it seems to me now, if you will allow me to say so, if I understand your position, that the desire you now have is to permit the Commission to render an absolute judgment, to go along and enforce it, and then let the railroad companies take an appeal? In other words, to hang a man and try him afterwards.

Mr. BACON. Not by any means; no. The Commission fixes its rate and the railroad complies with it, if it considers it reasonable and right. Mr. RICHARDSON. But the railroad does not consider it reasonable and right, then they have to take an appeal after you have enforced the judgment?

Mr. BACON. Exactly; but while there is an apparent inconsistency there, the actual practical working of it would involve very rare and exceptional instances of injustice. As I said yesterday, they are so slight that when they occur they would affect such a small interest as compared with the interests of the public at large, which is held in abeyance and which is subject to the continuance of the wrong rate, that it is hardly worthy of consideration.

Mr. COOMBS. But here is the proposition, assuming that they had a right to the last resort, a resort to the highest court of the country; assuming that, then, do you not abridge that right by enforcing an intermediate judgment? How about that constitutional proposition?

Mr. BACON. You will observe that it is not an inflexible thing that any carrier considering itself wronged may by appeal to the courts have the order suspended during the pendency of the proceedings if the court, on an inspection of the record, is of the opinion that the action of the Commission is wrong; that it proceeds either upon an error of law or is unreasonable upon the facts of the case. It is made the duty of the court by this bill in such cases as that to suspend the operation of the law until the question is adjudicated.

Mr. RICHARDSON. By injunction?

Mr. BACON. The bill does not prescribe that it shall be done by injunction. It makes it the duty of the circuit court if, on an inspection of the record, it is clearly of the opinion that the order is illegal or is unreasonable to suspend the order pending the proceedings. Let me read a copy of that

Mr. RICHARDSON. What is the difference, then, between that and the original plan of letting it first go to the United States circuit court and let them settle the question? If they have that right to revise at once, what is the difference in the position you take and the condition existing before, in allowing it primarily to go to the United States circuit court and let it be settled there?

Mr. BACON. To leave it to the judgment of the circuit court as to whether that ruling shall be suspended or not? At present it is not enforcible until the validity of the order has been passed upon by the

court.

Mr. MANN. That is not the only change you make.

Mr. BACON. In this connection allow me to read you the precise provision of the bill.

The filing of a petition to review an order shall of itself suspend the effect of such order for thirty days, and the court before which the same is pending may also, if upon an inspection of the record it plainly appears that the order proceeds upon some error of law, or is unjust and unreasonable upon the facts, and not otherwise, suspend the operation of the order during the pendency of the proceedings in review, or until further order of the court.

Mr. RICHARDSON. Then if the railroads want to take an appeal from that court it would have to go to the Supreme Court, but in the meantime the law will be enforced?

Mr. BACON. If it has not been suspended by the circuit court.

Mr. RICHARDSON. Suppose the Federal circuit court sustains the order of the Interstate Commerce Commission and says it is a reasonable rate, and still the railroad is not satisfied and wants to take it to a court of last resort that is, the Supreme Court of the United States. While they were doing that your order would be enforced, of course? Mr. BACON. That is true.

Mr. MANN. The bill specifically provides for that.

Mr. BACON. The purpose of that is to expedite proceedings. As you will see, in the present condition of affairs it is to the interest of the carriers to prolong proceedings to the utmost possible extent, and that has been their course right along. There are cases now before the courts that have been pending for nine years. There are numerous cases that have been pending for from five to seven years, and the railroads have pursued that course purposely.

Mr. RICHARDSON. That would apply to all courts throughout this country, to complainants and defendants throughout the country in general. There is a general tendency on the part of a good many parties to delay.

Mr. BACON. That is true; but it is greatly to the interest of the railroad companies to prolong this litigation, because during the pendency of the proceedings it is reaping the benefit of the rates which have been declared unreasonable and unjust. It has every incentive to prolong the proceedings. That is a condition from which relief must be obtained in some way or other, and it seems to this committee which I represent that the only way it can be obtained is by the course prescribed in this provision, which makes it to the interest of the carrier to expedite proceedings.

Mr. MANN. You say a case is pending now between the railroad company and the Commission which has been pending for nine years? Mr. BACON. There is one case which has been pending for nine years; yes.

Mr. MANN. I should think that was a serious reflection upon the Commission.

Mr. BACON. What the cause may be I am unable to say.

Mr. MANN. That is, if there is any reason for trying the case at all. Mr. BACON. But from my observation of the proceedings of the Commission I have never seen any reason or had any reason to suspect them of negligence or of want of proper care and proper exertion to bring their cases to settlement; but you who are lawyers on this committee know very well how easy it is for a party to postpone the trial of a case.

Mr. MANN. We know that one party alone can not postpone a case forever.

Mr. BACON. I will have to refer you to the reports of the Commission. The report for 1897 discusses it very fully, and the committee can obtain valuable information from that report.

Mr. RICHARDSON. I do not see why the same complaint does not apply to all other cases in life. My observation is that there is delay on both sides, and if you would apply that drastic rule to all the interests of life there would be a great upheaval.

Mr. BACON. The difference lies in the fact that in these cases before the courts of the country it is to the interest of both parties to secure an early decision, but in these cases I have been referring to it is to the interest of one party to delay the proceedings as long as possible.

Mr. RICHARDSON. I do not know that I agree with you that it is to the interests of both parties in cases in the ordinary courts to have a settlement, to conclude the cases. I do not think that is the case as a

matter of fact.

Mr. BACON. It is a question of pursuing the course that will result in the less evil to all parties concerned, and when you balance the probabilities and the injustice imposed upon one party or the other, you can not fail to see that the injustice to the public is at least a hundred times greater than any possible injustice that may result to the railroad company. In the first place, the case of the railroad company has been considered by expert and skillful men in that particular subject, and their decision is presumptively correct. The instances in which it would be found to be incorrect would be exceedingly small. They have been exceedingly small in the past.

In fact the cases in which the Commission has been reversed have been almost entirely upon the construction of the law in reference to the power it confers upon the Commission and not upon the merits of the decision of the Commission itself, with the exception of the cases coming under what is known as the long and short haul section of the law, which has been construed by the courts differently from the way it was construed by the Commission. That, however, relates simply to the extent to which the section was intended to control the determination of rates in relation to longer and shorter hauls; but as to the merits of a case, the actual merits of a case in which the Commission has fixed any rate or prescribed any differential, as it is termed, between two competing rates, the Commission has never been overruled. It has never been overruled on a point of right, on a matter of equity. Mr. MANN. Do you propose any amendment to the long and short

haul in this?

Mr. BACON. No amendment to that. That has been purposely left out in order to have this particular point determined by itself by Congress without being complicated with any other point in connection with the law.

Mr. MANN. The Interstate Commerce Commission makes one of the strongest complaints against the defect in that provision of the law.

Mr. BACON. There have been several cases adjudicated under this section which have practically nullified that section of the law, and that needs attention, needs remedy; but so far as the convention which I represent is concerned we do not propose to do everything at once. We want to have this question settled in the first place as to whether the Commission shall prescribe the rate to be substituted when it finds the existing rate wrong, as it did during the ten years of its existence which I have referred to.

Mr. RICHARDSON. That is, in effect, that the judgments of the Interstate Commerce Commission are presumptively correct?

Mr. BACON. That is it; yes.

Mr. RICHARDSON. You reverse the order of things; that a man is supposed to be innocent until he is proven guilty.

Mr. BACON. It is hardly a question of guilt.

Mr. RICHARDSON. Yes; it is parallel.

Mr. BACON. It is a question of dollars and cents.

Mr. RICHARDSON. I understand; but the principle is the same, the ruling of all other courts is against that presumption that you are asking for, until the final court passes upon it. It strikes me that way.

Mr. BACON. But you must observe the distinction between the enforcement of freight rates and the enforcement of contracts between individuals. The individual can be protected while his case is pending by the filing of a bond, and finally obtain justice and lose nothing by the long continuance of the case in the courts; but in the case of the enforcement of freight rates the public has got to suffer continuously while these cases are being determined, unless some relief is provided, and that burden has become to be so great and so extensive and so general throughout the entire country that it certainly should receive the attention of Congress, and relief should be provided if there is a possible way for it to be obtained.

Mr. MANN. Do you expect to give us a lot of testimony showing that this present condition is very hard upon shippers?

Mr. BACON. We do not propose to present very much testimony of that character, although we will present some; but on that point we will depend upon the hearings that were held before the Senate committee on the Cullom bill. These principal provisions of our bill are substantially the same as the provisions in the Cullom bill. That case was exhaustively heard by the Senate committee two years ago, although action was not reached.

I will proceed further with a quotation from the report of the Industrial Commission on "The objections to power to fix rates in advance," the very question that is before us. That report says:

I would like right here to read a brief extract from an editorial which appeared in the Railroad Review of January 18, a leading railway journal, on amending the interstate-commerce law, which is as follows:

Elsewhere in this issue will be found a protest written by Mr. Walker D. Hines, vice-president of the Louisville and Nashville Railroad, against the proposed legislation to amend the act to regulate commerce so as to give to the Interstate Commerce Commission authority to determine rates.

Mr. Hines, as a lawyer, perceives great danger in transferring from the owners of the property to the Interstate Commerce Commission or to any other outside authority the power of rate making, but it is altogether possible that he is not as thoroughly posted as to the danger to railroad revenues which attaches to the present

method.

This is of course a railroad view of the subject.

If any tribunal to which such authority should be committed should be one-half as reckless with rates as are the individuals at the present in control, there would be such a protest throughout the length and breadth of the land as has never yet been heard.

If the only question at issue was the simple one of rate making by the Interstate Commerce Commission, there would be little difference of opinion on the subject. It is a mistake to suppose that the Commission desires this power simply as a question of authority. It is only fair to say that so far as they advocate the amendment of the law in this particular it is for the purpose of making possible the administration of the law in accordance with the design thereof.

No denial whatever of the arbitrary and enormous power which the right to make freight rates imposes can be entertained for a moment. A pertinent question, however, is as to whether the exercise of such power by irresponsible railroad managers, as at present, is reasonable. If, according to the statement of the railroad interests themselves, the power to make freight rates involves the right to make or break men, industries, and even the prosperity of entire States, how great is the necessity for adequate supervision, subject to appeal to the courts. This is apparently recognized I-C L-2

by the more conservative representatives of the carriers themselves, as evidenced by testimony before the Industrial Commission.

* *

Under the circumstances at present prevalent this arbitrary power is exercised by one party, namely, the traffic managers of the railroads in interest, without any appeal whatever. * As against the claim that the exercise by the Commission of the right to prescribe rates involves the transfer of all rate-making power for the roads of the country to an administrative commission, it may be urged that during the ten years that this power was supposed to exist no such revolutionary effect was discernable. So long as the Commission is restricted to issuing orders only upon complaint and after investigation, it is scarcely to be said that the roads will be deprived of their right to promulgate rates in first instance for themselves. * * The burden of complaint is at the present time that the railroads are the sole arbiters as to reasonable rates, and it seems illogical, therefore, however expedient as a matter of policy it may be for them, to allege the injustice of such a situation as a ground for objection to conferring rate-making supervision upon a Government commission.

*

The regulation of commerce is a large question. It requires among other things that rates shall be equitable both to the railroads and to the people. It also includes the adjustment of rates as between localities. It may fairly be doubted if in the absence of the power to say upon investigation what the rate should be there is any hope of accomplishing these things.

That the law needs amending is admitted. How it shall be amended is a question on which there are many divergent views, and in this respect railroad men differ as much as others.

I would say in this connection that the matter of prescribing the proper rate, when the existing rate is found to be wrong, is the only practical method of correcting a discrimination that is found to exist between two different competing localities. Unless, when the Commission has investigated a case and found that the rate is discriminative, it can state what change shall be made in the rate by the defendants-in those cases, of course, there will be two or more defendantsunless it can prescribe what rate shall be put in force by both defendants or all of the defendants in relation to these two particular points in question there can be no remedy provided whatever. If it simply declares that it finds the existing rate to be wrong and orders a discontinuance, the discontinuance of the existing rate may be made by a very slight change in either one rate or the other, which will afford practically no relief. To give relief the Commission must go further and say just what rate is requisite to be made to place the two competing points on an equality.

A case of that kind came up five or six years ago, called the Eau Claire case, which resulted in just that way. It was a case of discrimination in rates on lumber from Eau Claire, Wis., and from Winona and La Crosse to the same points, those two places being points on the Mississippi River somewhat nearer-100 miles or thereabouts nearer to the points of destination than Eau Claire. The Commission heard the case and decided that the existing differential in rates, which was, I think, 5 cents a hundred pounds, if I remember rightly, was too large, was an unreasonable difference, and that it discriminated against the product of lumber in the region of Eau Claire; and the Commission declared that a reasonable difference in the rates between the points in question would be not to exceed 2 cents a hundred pounds.

One of the railroad companies, the railroad company taking the business from Eau Claire, immediately reduced its rates and made its differential 2 cents a hundred pounds instead of 5 cents a hundred pounds, as compared with the rates from Winona and La Crosse. The railroads taking the business from Winona and La Crosse immediately