Mr. KNAPP. You have simply got a final decree that the rate origi nally complained of was too high.

Mr. CORLISS. And they could start again at 99 cents.
Mr. KNAPP. You have got no lower rate fixed.

relief to anybody. That must be so.

You have no actual

Mr. MANN. They have the power to decide that a rate is unreasonable. That is all they can hold, as a matter of law?

Mr. KNAPP. Under the present statute.

Mr. MANN. They can argue all they please as to what is a reasonable rate, and then it is in the discretion of the railroad company to accept the statement of the court as to what is considered to be a reasonable rate or not, just as they please, or at least you have not tried that to see whether it is or not?

Mr. KNAPP. There has not been time to get a case through the Supreme Court.

Mr. MANN. You have not any decision on that. All you could do was to say that the dollar charge was too much, but the Supreme Court could say what a reasonable charge was.

Mr. KNAPP. No, sir; they can not do it.

Mr. MANN. They can say what a reasonable rate is, but they can not issue an order fixing what it shall be.

Mr. KNAPP. Who can say it?

Mr. MANN. The Supreme Court of the United States.

Mr. KNAPP. No, sir.

Mr. MANN. Oh, yes, they can. It may become very necessary in arguing a particular case. But they can not fix it as a future rate. Mr. KNAPP. They can only say to the extent of deciding that the rate has been or is unreasonable.

Now, gentlemen, that is the whole question; that is, that is the vital question, the important question.

Mr. ADAMSON. There would still be a good deal of circumlocutionary legislation even after you got the Corliss bill?

Mr. KNAPP. Well

Mr. ADAMSON. If the Supreme Court decides that the rate you fix, ven under the Corliss bill, is too high, you can fix another rate, but hey can still make thatcan they not?

Mr. KNAPP. No, sir. The Corliss bill provides that when the Commission has heard a case in the way I have described

Mr. ADAMSON. Yes, sir.

Mr. KNAPP (continuing). It may not only condemn a rate complained of, but may prescribe the rate to be substituted in its place in the future.

Mr. ADAMSON. That goes to the courts, and that case is carried through, and they decide that it is too high, and then the Corliss bill says that you may sit down and make another rate, and they can say that that is too high

Mr. KNAPP. Yes, sir; of course.

Mr. ADAMSON. Why don't you fix legislation so that it has an end somewhere? It looks like human sagacity ought to be able to fix it so as to end this matter somewhere.

Mr. KNAPP. I undertook to say in the beginning that I am not in favor of extreme or radical changes in this law.

Mr. ADAMSON. You would like the present generation to get some benefit out of this, would you not?

Mr. KNAPP. I think the development of our laws on this subject should be by evolution, and not by revolution. And I am not here to advocate-because no pending measure proposes it-any arbitrary or final power on the part of the Commission.

The question is right here, in very narrow compass, and very easily stated. When you have the complaint and the parties all before you and the question examined with all the light thrown upon it that can come from the testimony of witnesses and the argument of counsel, what order shall the Commission have authority to make in such a case? That is all the question there is. That is the real question here. Mr. RICHARDSON. Right there, do you not think that as a mere matter of common sense and conservatism, from the bench or from any commission that has such authority as that, if the Supreme Court had held that a dollar charge was not reasonable, or any authority was given to you to take advantage of the Corliss bill and fix another charge without any further evidence, that you would fix it, in view of the decision of the Supreme Court, and use conservatism and good judgment in trying to strike a middle ground?

Mr. KNAPP. I can not imagine a commission that would not do that. Mr. MANN. You can imagine a railroad company that would, but not a commission?

Mr. RICHARDSON. That is another question entirely.

Mr. ADAMSON. You say five years have passed, and you have not got the first case determined yet. If you decided a case under the Corliss act, and the railroads spent five years in going around through the courts, and then it comes back and you take another hearing, and on your own suggestion, or on the suggestion of the court's talk, you make another rate-you may hear evidence or not, or you may fix the new rate on the record, and then the railroad enters another rate, and then the court says that you have not got it quite low enough yet, and it is not at all certain that the Supreme Court will ever decide to let a rate stand; there is a generation gone

Mr. KNAPP. And in such a case the recommendation of the Commission has been heralded to the country as "the inordinate demand of the Interstate Commerce Commission."

Mr. MANN. Mr. Adamson is pointing at the question, as I understand it, as to whether the court, the Supreme Court of the United States, which refused your decision upon all the evidence you had before it, shall have the power to say what is a reasonable rate.

Mr. KNAPP. Do not let us have any confusion on that. No court can fix a rate for the future. If authority is given to determine in such a case as I have described, what rate shall be substituted for the one under consideration, that authority can be given only to a commission, or exercised directly by Congress itself. It can not be given to a court.

Mr. STEWART. Right there, railroad corporations want to avoid litigation?

Mr. KNAPP. Assuredly they do.

Mr. STEWART. In case the Supreme Court should decide that the Commission was right, and they should fix a reasonable rate for the future, do you not think that the corporation in order to avoid litigation would acquiesce, if it were a reasonable rate?

Mr. KNAPP. Certainly.

Mr. STEWART. To avoid the litigation Mr. Adamson speaks of— further litigation?

Mr. KNAPP. When you bear in mind the very limited authority the Commission now has, which is simply to say, "This thing is wrong,' and bear in mind that the order of the Commission saying it is wrong is not obligatory upon anybody, that before it can be enforced there must be a suit in the courts for that purpose, which must be carried through to the courts of last resort; when you take all that into account, I think it is to the credit of the railways of the country as a whole that so many of the recommendations of the Commission have been adopted.

Mr. MANN. You say that no court can decide what is a reasonable rate?

Mr. KNAPP. For the future.

Mr. COOMBS. It can not establish a rate?

Mr. KNAPP. Can not establish a rate.

Mr. MANN. That may be true that it can not establish a rate.

Mr. KNAPP. A court can decide whether a rate has been reasonable or not.

Mr. MANN. The court can decide whether a man has offered a reasonable rate under the common law, and always could; that is a future rate.

Mr. KNAPP. Yes, sir; but it applies only to the time when the tender was made, and to the particular traffic to which the tender relates.

Mr. COOMBS. Does the Supreme Court pass upon questions of fact in its appeals?

Mr. KNAPP. Oh, no; no, sir.

Mr. COOMBS. Does the circuit court of appeals?

Mr. KNAPP. I understand, of course, the circuit court will pass upon the facts.

Mr. COOMBS. Upon your appeal, what do you appeal upon?

Mr. KNAPP. Let us try to avoid confusion at that point. Bear it in mind, gentlemen, that while the determination whether a given rate is that it has been-reasonable or not, as a judicial question, the determination of the rate to be substituted in the future is not a judicial question, can not be made a judicial question, and that authority, if exercised at all under the circumstances, must be exercised either by the legislative body itself or by an administrative tribunal to which some portion of the legislative power is delegated, Now, that being so, of course you must bear this in mind, that it is incorrect and misleading to speak of an appeal from the order of the Commission. The Commission is not a court, and in a constitutional sense the carrier has not had its day in court when the Commission has decided its case. The carrier gets its day in court under present law when the suit is brought to enforce the order.

Mr. ADAMSON. Your idea is not to ask for a greater number of powers, but for more power as to the few things that you do try to do; that while you do not seek to go further and fix a rate, or decide how low a rate ought to be, you want the power, when you say a rate is too high, to put that opinion in force and stop the railroad charging that rate?

Mr. KNAPP. This bill proposes that the Commission shall not only have authority to say that this rate complained of is wrong, but to

determine the extent to which it is wrong, and prescribe the rate to be put in its place and observed in the future.

Mr. ADAMSON. I talked to you a while ago about the wheel going around so often. Had we not better improve that bill, or amend it, so as to say that after that thing has been back to you a certain number of times it shall stop, except under such conditions as extraordinary motions made in court, showing that extraordinary conditions exist, beyond the power of a party to control, or something of that sort, and so put an end to the matter somewhere?

Mr. KNAPP. With reference to that, as I said, when you have determined the question as to the authority of the Commission, what kind of an order to make, then the next question comes, what effect shall be given to that order; how shall compliance with it be secured; how shall a review of it by the courts be permitted?

Mr. Thurber, this morning, in commenting on that branch of the case, indicated his opposition to the method of procedure embodied in the Corliss bill, which is that the order of the Commission shall be self-enforcing, so to speak, by reason of accumulating penalties for disobediences, the carrier having the right to go to the court and file a bill to restrain the order; but Mr. Thurber spoke of that as shifting the burden of proof. I want to call your attention to the fact that it does not shift the burden of proof at all. The importance and desirability of that change is not in any way connected with the burden of proof, because under the law as it now stands, when the bill is filed to enforce the order, the findings which the Commission have made constitute a prima facie case. The burden of proof is now on the carrier when you get into the courts. The decision of the Commission that this rate is unreasonable and that the carrier must cease and desist from charging it, is prima facie good in the circuit court, and the burden of proof is on the carrier to show otherwise.

Mr. COOMBS. Is that a judicial order or a legislative order?
Mr. KNAPP. It is a part of the present law.

Mr. COOMBS. I am asking you for a distinction. or a legislative order?

Is that a judicial

Mr. KNAPP. Well, it is an act of Congress which prescribes the method by which the authority of an administrative tribunal is to be enforced.

The CHAIRMAN. The hour of adjournment has arrived. We will be glad if you will be here tomorrow at half past 10, Judge Knapp. Mr. KNAPP. Very well.

(Thereupon, at 12 o'clock m, the committee adjourned until to-morrow, Friday, April 25, 1902, at 10.30 oclock a. m.)

FRIDAY, April 25, 1902.

The committee met at 10.30 o'clock a. m., Hon. William P. Hepburn in the chair.

The CHAIRMAN. The committee will be in order. Judge Knapp, will you resume your statement?

Mr. ADAMSON. Before Judge Knapp proceeds I wish to say that I have been listening with great interest to these gentlemen, and I wanted to hear Judge Clements, but I have an important engagement

at the Treasury Department with some constituents of mine, and I want them to understand why I withdraw. I will have to ask you to

excuse me.

STATEMENT OF HON. MARTIN A. KNAPP, CHAIRMAN OF THE UNITED STATES INTERSTATE COMMERCE COMMISSION-Continued.

Mr. KNAPP. Mr. Chairman and gentlemen, you have honored me with such respectful attention during the making of my quite protracted statement that the best acknowledgment I can make is to bring my remarks to a close at the earliest possible monent.

I have endeavored to point out that the first question on this branch of the case is as to what orders the Commission shall have authority to make; and I do not know that I care to add anything to what I have already said upon that subject. You understand the present situation. You are aware that after the fullest investigation, upon complaint, notice, and due hearing, the only order which the Commission now has authority to make is, if the facts so warrant, for the carrier to cease and desist from charging the particular rate, or maintaining the particular rate relation, which is complained of. The question is whether in those cases, and under those circumstances, and subject to the conditions proposed, the Commission shall have authority not only to say that the rate or rate relation complained of is unlawful, but also authority to prescribe in the first instance a rate or rate relation which shall be substituted in place of the one complained of. That is the question.

The CHAIRMAN. Now, Judge, if this will not interrupt you, I wish you would state how comprehensive that order should be, looking to the entire rate charges of a system of roads; whether it should be so comprehensive as to cover an entire schedule of rates, as one act, or whether it should be limited to the particular rate that was complained of. I ask that question for this reason: that I am satisfied that there are parties who would, perhaps, be contented to have, we will say, to illustrate, a single rate regulated by a commission when they would not be willing that at one time and in one order there should be an entire rearrangement of the rates of their whole system of roads. If you would give your views as to that matter, whether the power ought to be limited, and if so, how it would be limited, I think the committee would be glad.

Mr. KNAPP. If I correctly understand the present law, as it would be modified by the provisions of the Corliss bill in the particular section now mentioned, I must say that it is conceivable it would be within the terms of the law that the entire schedule of a given carrier, or system of carriers, might be made the subject of complaint and adjudication. I think I perceive the objection which is suggested by your remarks.

Mr. MANN. If that were the case, would it not be necessary that the court, in passing upon it, should have the authority to say that the order should remain in force as to one part of it if the court should find as to a particular commodity, for instance, the order made a rate unreasonably low? Under this provision the court can either order the order of the Commission to remain in force or not, and if it