Mr. ADAMSON. Yes; that is giving them their constituted authority in that way.

Mr. KNAPP. Yes, sir; in the manner that the law provides it shall be furnished him for that purpose. But what I would say is that in the ordinary course of business the large shipper knows exactly what the rates are between all points, and he knows to the last cent what the rates are and the route and the combination which will give him the lowest possible rate under the tariff.

But the occasional shipper may be a man who, if he consulted the tariff schedule, would have difficulty in knowing what the rate would be on a cargo of furniture, for instance, and he would naturally ask the agent what it was. Now, if he takes in good faith what he is told and pays what he ought to pay certainly he ought not to be indicted.

Mr. MANN. I do not see how putting the word "knowingly" in there would help that man out. The guilty action lies in avoiding the tariff. Now, the language of the Corliss bill is:

Any person who procures, or solicits to be done, or assists, aids, or abets in the doing of any of the aforesaid acts

If a man gets a rate, he assists in doing the act which is declared illegal. It does not make any difference if he knows it is illegal or not. He knows that he does the act, and he does that part of it knowingly. That is all your "knowingly" refers to.

Mr. KNAPP. He knows the rate he gets, but he may not know it is or is not the published rate and the rate that he ought to pay. That is what "knowingly" means.

Mr. MANN. Putting "knowingly" in there would not affect it any. Under the bill we have been discussing, and in a case of that sort, the court has no judgment in the matter except finding the man guilty and ordering him to pay a fine of $5,000.

Mr. STEWART. In the Corliss bill it does not say that the shipper must "knowingly" violate the published rate.

Mr. KNAPP. I supposed that it was there, as I say. It is in the present law. The word "knowingly" is used in the present law, and suppose with that meaning and for that purpose.

Mr. MANN. I suppose you would not say that the traffic manager of that railroad company could escape. He said that he gave me the rate. I did not know what the published rate was.

Mr. KNAPP. The individnal might.

Mr. MANN. Oh, no.

Mr. KNAPP. I do not know; he might do so; but query: Whether the corporation could escape?

Mr. RICHARDSON. Would not Mr. Mann, in the case he has used as an illustration, where he accepted that rate, where that rebate was given him and he accepted that, make himself a conspirator and jointly liable with the company?

Mr. SHACKLEFORD. Not if he received back an overcharge.

Mr. KNAPP. Perhaps I do not quite appreciate your question. Mr. RICHARDSON. Would not he be an accessory after the fact if he participated in it, and now when he received it back if it was an illegal charge, an unjust one, would he not make himself liable?

Mr. KNAPP. The offense is not in doing the thing, but in "knowingly" doing it.

Mr. RICHARDSON. Then when he accepted the rate would he not

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Mr. KNAPP. No, sir; he could not be made an accessory after the fact after the offense was committed, because he did not know at the time that the rate he paid at the time was not the published rate.

Mr. WANGER. As I understand it, the rebate may be perfectly justifiable and proper to correct an improper charge!

Mr. KNAPP. Yes, sir; and it is often our experience. These matters are adjusted very frequently through our office, where there has been an overcharge.

Mr. ADAMSON. But that is not what you technically call a rebate? Mr. KNAPP. We look it up, and if it appears that there is an overcharge the matter is always adjusted.

Mr. ADAMSON. That is more a matter of mistake?

Mr. KNAPP. Yes, sir; that is an entirely different question.

Mr. ADAMSON. If you are going to invoke the pains and penalties of the criminal law and quasi-criminal law, do you not think you had better go at it under the rules of criminal law, and not be too squeamish about what you do? People are convicted every day under laws they never heard and did not know existed because they do things, and if you are going at this to remedy crying evils, had you not better make it to the interest of everybody to look and find out what the laws provide?

Mr. KNAPP. I am obliged to you for asking that question. It reminds me of what I had in my mind, but had overlooked so far.

In a sense you can, of course, test the propriety or value of a law by what could possibly be done under it; but ordinarily when you are dealing with a subject of this kind, or legislation of this kind, you take into account the ordinary experience of men. Put it exactly in the form, suppose, that you read in the Corliss bill, and the actual taking of a less rate, although innocently done, would subject a shipper to an indictment and fine; but do you think it would ever happen that such a man would be indicted as a matter of actual experience?

Mr. MANN. It has happened that innocent men have been indicted and found guilty.

Mr. KNAPP. Yes, sir; and as Mr. Adamson remarked, if you have an emergency to deal with, a permanent and distressful situation of affairs to deal with, perhaps you ought not to be too squeamish in applying the remedy, because occasionally an innocent man would be punished.

Mr. MANN. You know what the old maxim is?

Mr. SHACKLEFORD. Could you not obtain your remedies more easily if everyone was exempt except the corporation itself? Would not that promote the obtaining of testimony? Let the shipper be free, and then there is no reason why he should not disclose any transaction regarding an illegal rate, if nobody except the corporation itself, the carrier itself, were made amenable to the penalties. In our State we have a law against bribery, and the man who gives the bribe and the man who takes the bribe are both amenable under the law, and neither one has any motive for telling what has been done.

In this matter you say that both sides shall be punished, and you shut up both sides, and you have no means for getting the testimony of either; but if the shipper shall be liable, but the carrier alone, you will arrive at some way of meting out the punishment.

Mr. KNAPP. I do not care to take the time of the committee with any extended argument on that question.

Mr. WANGER. Do you think the remedy by indictment is the most expeditious and effective? Suppose a corporation was made liable to pay, say, at least the sum of $5,000 for each offense, and suppose two or three times the amount of the preference, the rebate or the refund granted to be recovered in an action at law, would not that be a far greater deterrent; would not the proposition come right home to the officers of the corporation, "We may have to pay several hundreds of thousands of dollars if this thing is discovered?"

Mr. KNAPP. I think so.

Mr. ADAMSON. Do you think, under Judge Shackleford's idea, that it is all right to make it criminal for the corporations to do a thing and then offer inducements to all the balance of mankind to induce them to do it? Would not that be the Judge's idea?

Mr. KNAPP. I must say that such a proposition does not at the first blush strike one as fair, where two parties are engaged in a transaction and one of them is held to commit a crime and the other not.

Mr. ADAMSON. If a thing is wrong, ought not everybody who has anything to do with it be subject to prosecution?

Mr. KNAPP. Certainly, that is true. But on the other hand, the wrongdoing is of such a nature that the most effective and useful method of correcting it or preventing it ought to be adopted. That method may be by allowing one of the parties to escape. Now, if that is the proposition, I am not here to oppose it by any means.

Mr. SHACKLEFORD. Not to punish crime, but to relieve the shipping public from these evils; that is the thing that you are trying to do. Mr. ADAMSON. You are talking about making criminal law, though? Mr. KNAPP. Yes, sir.

Mr. ADAMSON. It ought to be made with equality, justice, and in accordance with the time-honored rules of criminal law.

Mr. KNAPP. I have assumed, as I say, that the law would remain as it is, making the shipper liable as well as the carrier; but if it is to remain in that way, then I want the shipper liable for departing from the rate without being obliged to show that an actual discrimination in his favor resulted.

Mr. ADAMSON. It should result, then, in making the shipper liable, given this view of it, that where you go and induce the carrier to give a reduced rate you injure me, and I have just as much fault to find with you as I have with the corporation, and you are just as guilty as the corporation.

Mr. KNAPP. Yes, sir; because the man who pays the higher rate suffers from the fact that his business rival has the same service at a lower rate. He, in a sense, is the real beneficiary. The railroad simply loses so much revenue; but it accepts the lower rates in order to get the business at all.

Of course a railroad is not going to give a reduction and suffer under a cut rate if it is sure to get the traffic anyway. It makes that secret bargain in order to get the business from some other road. The revenue of the railroad is depleted, and the man who really profits is the shipper who gets the cut rate, and I think in many cir cumstances the moral turpitude of the shipper is greater than that of the carrier. And it does not exactly satisfy me, speaking for myself alone, to say that in such a situation some subordinate traffic managers can be fined, and the men who have put hundreds of thousands of dollars in rebates into their pockets can not be reached. That may

be the most effective way to deal with the evil, but I am not here to advocate it.

The CHAIRMAN. Suppose a case of a conviction against the corporation, would you levy the punishment against the corporation or against the agent of a corporation?

Mr. KNAPP. I would do just as they do on the other side. I would make the corporation liable, and also its officers and agents, and also the shipper liable, and also his officers and agents. But I think there is much in keeping them both in from this point of view. Now, see what the actual situation is. Remedies of this kind must be applied by the Federal courts and the Federal district attorneys. All that the Commission can ever do is to furnish information on which they shall proceed. Now, each situation therefore ought to be inquired of and dealt with in reference to its peculiar circumstances, and when a case of extensive rebates or cut rates is brought to the attention of the Federal authorities, it might be a case where, in their judgment, the more guilty party was the shipper and the one more easily convicted the carrier, or it might happen that the more guilty was the carrier and the one more easily convicted was the shipper, and it seems to me that those who are charged with the responsibility of enforcing the law ought to have the opportunity, as they practically would under this proposed law, of deciding against which one of the parties they would proceed.

Mr. WANGER. I imagine it would not be very appropriate to proceed against both.

Mr. KNAPP. Yes, sir; ordinarily you have probably got to call only one to prove the case against the other, and when you call one and compel him to testify, he goes scot free.

Mr. WANGER. He could refuse to answer on the ground that he would incriminate himself.

Mr. KNAPP. No; he can be forced to testify, and being forced to testify, he is granted immunity. That has been taken up to the Supreme Court of the United States twice, and we have got that settled. The Commission can subpoena any person supposed to have knowledge of a wrongful transaction of the kind we are now discussing and compel him to testify, and if he refuses to answer we can go to a Federal judge and get an order compelling him to testify, and if he still refuses he may be sent to jail; he can not excuse himself any longer, because the statute which it was held gives him absolute immunity secures him his constitutional rights, so that he can be compelled to testify. And, as I have explained, of course everybody we call is granted immunity, and it is a practical question whether in a case of this kind the Commission ought to go on

Mr. ADAMSON. Do you mean that he is entirely relieved from all danger of being tried and from the penalties in that case, or do you mean simply that that testimony shall not be used against him?

Mr. KNAPP. That was the law originally. That was no part of the interstate-commerce law, but it was a law that had been on the statute books for many years, that his testimony could not be used against him. The Supreme Court of the United States held that it was unconstitutional, that part of that statute did not secure to him the immunity which the Constitution provided for. If he was compelled to testify, that the knowledge hereby obtained might furnish clues which would lead to his conviction later on without the use of that testimony, and

that in order to secure him his constitutional right the offense which is committed must be considered to be condoned by the fact that he is called.

Mr. ADAMSON. I do not remember the case, but I would like to know if it was taken into consideration the fact that his testimony might tend to blacken his character

Mr. KNAPP. If you will read the decision of the Supreme Court on that question you will find that very fully discussed. They said that society does not owe the duty to a man, who, under the Constitution, refuses to testify and confesses that he is a criminal, to protect his reputation. If it protects his person and his pocketbook he has had his personal immunity. That is all settled.

Now, gentlemen, that is all I care to say upon that branch of the case, upon the defective and unworkable condition of those provisions in the law which seek to prevent rate cutting and secret contracts. And those are two changes which, in my judgment, ought to be promptly made. This Commission called the attention of Congress to this defect in the law directly that it was ascertained; pointed it out fully in its reports to Congress, and has repeatedly done so since, and yet, now, for more than ten years we have been waiting for Congress to so change this law that the corporation, the carrier, could be indicted and punished.

And the failure, as a practical question, of efforts to enforce the criminal law is largely because the corporation carrier is not liable, and the failure, the inevitable failure, to convict the shipper results from the fact that he is not liable unless you can show not only that he got the lower rate, but that that lower rate operated as a discrimination in his favor and against somebody else in the same place and at the same time. And that, practically, you can not show. You can not show it certainly in the worst class of cases, where great aggregations and combinations of shippers use their influence to get secret rates and preferential rates, for there they all get about the same thing.

Now, I say do one of two things; either leave the shipper out entirely, or else make him liable, the same as the carrier, if he knowingly takes a rate.

Mr. DAVIS. I was going to say, from my limited idea of the criminal law, I understand that it requires a good healthy condition of public sentiment in order to make a criminal law operative. Now, do you not think that if you undertake to make the shipper a criminal because he has done the best he could, that you are putting something in the law that will not stand; that evidently they must do the best they can with the railroad, and that you will never get that law enforced?

Mr. KNAPP. No, sir; because you assume that the shipper has done the best he could, and that is the case of the infrequent shipper. The thousands and millions of dollars paid in rebates are paid to men who do not need it and ought not to have it, and know perfectly well that they are violating the law.

Mr. DAVIS. Suppose some infrequent shipper, who rarely ships and does very little business that requires shipping, gets the best rates that he can. Suppose I want to ship some books and furniture from Washington and I go and get the best rate that I can, and I can not study