FRIDAY, May 23, 1902.

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

STATEMENT OF MR. WALKER D. HINES, FIRST VICE-PRESIDENT OF THE LOUISVILLE AND NASHVILLE RAILROAD COMPANY.

Mr. HINES. Mr. Chairman, I will state, to get it in the record, that my attention to this subject has extended over a number of years, perhaps the last six or seven years. I have given attention to it in the capacity of assistant chief attorney of the Louisville and Nashville Railroad Company up to last fall, when I was made first vice-president of that company, which is the capacity in which I now appear.

As the time is somewhat limited, I will not attempt to cover the whole field that is embraced in these proposed amendments to the interstate-commerce act, but will try to confine what I have to say to the rate-making power, and I regard it as very important in that connection to say a few words about the present law.

Impressions have undoubtedly been created for a number of years by the statements of the Interstate Commerce Commission and by its members that there is now practically no control whatever over the railroad rates in this country, to prevent their being excessive or to prevent discriminations between localities, but that impression is altogether erroneous.

The present law prohibits unreasonable rates and prohibits all undue preferences between localities or persons or sorts of traffic. It authorizes the Commission to order the discontinuance of any of these things prohibited. It gives prima facie validity to the orders made by the Commission, and upon an attempt either by the Commission or any interested party to enforce that order in court it makes it the duty of the court to give a speedy hearing and to enforce the order unless it is shown to be unlawful. No appeal from the order of the circuit court can supersede that order. That is a point that has generally been misunderstood. When the circuit court passes upon the order and decides that it is a legal order and should go into offect, the act provides that no appeal shall suspend the operation of the order which the circuit court makes.

Mr. RICHARDSON. That is the complaint that the Interstate Commerce Commissioners make, right there, that there is such a delay in the courts.

Mr. HINES. I was going to speak of that. But on that point, about this suspension of the orders upon appeal from the circuit court, the fact is that when the circuit court comes to make its order, if it appears that the public interests will be best served by suspending its own order, it can do so, but unless the circuit court takes affirmative action and suspends that order, no appeal that the carrier can take will prevent the order going into effect at once.

Mr. RICHARDSON. The complaint of the Commissioners is that delay in the courts practically nullifies the law, and do you not think that the remedy for that would be to make those cases preferred on the dockets?

Mr. HINES. I think so.

Mr. RICHARDSON. And give them a prior trial?

Mr. HINES. I think so; a complete remedy. But just to state now briefly an illustration of that in a case which occurred down in one of the Southern States. The Commission condemned a certain rate as unreasonable and ordered its discontinuance. The circuit court reached the conclusion that the prima facie effect of the order of the Commission had not been overcome, and therefore sustained the order of the Commission. The carrier appealed, but its appeal did not supersede the order. The carrier, of course, did not wish the order to be put into effect and to change its rate pending its appeal, if it could help it, and it applied to the circuit court for a suspension of the decree of the circuit court pending the appeal; and it was wholly in the discretion of the circuit court as to whether it would do that, and in view of the doubtful character of the case, and of the hardship which the carrier would incur, that court ruled that if the carrier would give a bond in some large amount, and would keep an accurate account of all shipments made under the rate involved, that on those conditions its decree would be suspended pending the appeal.

Now, that is the present law, and I submit that it is a workable statute and a just statute. The circuit court is in a position to know whether the public interests require the immediate enforcement of an order. If so, it can refuse to authorize the suspension. If it grants the suspension, it can do so upon such terms as it deems proper. So that the statement that an order of the Commission can not go into effect until the court of last resort has sustained it is incorrect.

The question has arisen as to delays, and it has been stated that the average time which it takes to get a decision by the courts on an order of the Commission is four and one-half years. That statement is misleading, because it takes into account cases in which the Commission has proceeded on an entirely erroneous view of the law, and the courts have almost without exception declined to enforce the Commission's unlawful orders. Of course, therefore, it was not proper that those orders should go into effect at any stage of the litigation, and as a matter of fact, they ought not ever to have gone into effect, and have never gone into effect, because the courts, almost without exception, have declared the orders to be unlawful.

Now, when the Commission proceeds within what are now the pretty well defined limitations of the act, there is no occasion for delays of that character. It is simply a question of the time within which the circuit court will take up the case and decide it. If the circuit court believes that the order of the Commission is lawful, then it is for that court to say whether it shall go into effect immediately, or whether it will suspend the order during the appeal.

The fact that considerable time elapses in the circuit court is not due to any settled disposition or determination of the railroads to delay the case. It is due to the fact that the cases are of a difficult character, involve large amounts, and that everybody connected with them. sees the importance of proceeding slowly, including the Commission itself; for I think the delays in the Commission will equal those in the circuit court, and it is simply a question of procedure in the circuit court. Of course, if that court were directed to give precedence to these cases over others, those delays would be shorter; but I contend that the present statute is a perfectly workable and just statute.

Now, it is said that all this does not amount to anything. Mr. Prouty said, "What good does it do for us to order a discontinuance of undue rates and preferences?" And Mr. Knapp said that the railroads might comply only in a technical way. This is the remedy which Congress deliberately established, after prolonged investigation by a special committee which devoted much time and ability to the subject. Mr. MANN. Before you go into that, can you tell what are the facts in reference to the cases that have actually been tried, pending the appeals, and whether the order went into effect or not?

Mr. HINES. I am coming to that immediately, if you please. I submit that a remedy thus deliberately adopted is entitled to a thorough trial before it is thrown aside as worthless, and that trial has never yet been given, because almost without exception, until comparatively a short period in the past, the Commission has not proceeded at all according to the law.

Coming now to the question as to the history of the various cases, as I recall, there have been only two cases out of the numerous cases which have been before the courts in which the Commission has been sustained. Of course, in the cases where the Commission has not been sustained, it was natural that their order should not put into effect.

Mr. RICHARDSON. Right there, just let me understand you. I ask for information. You say that out of the great number of cases where the Commission fixed rates, they have been sustained in only two cases?

Mr. HINES. That is my recollection.

Mr. RICHARDSON. I just want to get what information you have. Mr. HINES. If I find that I am incorrect, I will send the stenographer a correction on that point.

Mr. MANN. I suppose you mean two cases that have been appealed to the upper court?

Mr. HINES. I mean two cases altogether.

Mr. RICHARDSON. You mean sustained by the higher court?

Mr. HINES. The court of last resort.

Mr. RICHARDSON. Or based on it?

Mr. HINES. Yes, sir; the Supreme Court of the United States.
Mr. MANN. The Supreme Court of the United States?

Mr. HINES. Yes; and I mean the cases that are now pending in the lower court; only two of those cases.

One of those cases was a comparatively early case, the Social Circle case, so called. In that case the circuit court held that the order of the Commission was unlawful. Of course, it therefore did not put the order into effect. The circuit court of appeals held that one branch of that order was unlawful, but that the other was lawful. The law provides that no appeal shall supersede the order of the circuit court; so, as I understand it, it is the order of the circuit co urt that controls pending appeals.

Mr. MANN. Is it your recollection that there are only two cases in which the circuit court has affirmed the order of the commissioners? Mr. RICHARDSON. I understood you to say the court of final resort. Mr. HINES. Yes, sir.

Mr. MANN. The question could not have arisen over this as to the practice

Mr. HINES. That case went to the Supreme Court, and the circuit court was affirmed on both branches.

Mr. RICHARDSON. Can you give the percentage of affirmations-what is the number of opinions that were appealed from, and what is the percentage of them which were sustained? If there are only two cases, have you any idea how many went up that were reversed?

Mr. HINES. I suppose ten or twelve cases were passed on by the Supreme Court, and a great many more by the lower courts that have not been appealed.

The other case which I have in mind which has been sustained is a case in the Southern courts, where the court decided in favor of the Commission, but permitted its decree to be suspended on appeal, and that went to the circuit court of appeals and was reversed on all points, and I believe it is now in the Supreme Court.

As I say, I will make any corrections which I find necessary when I get the stenographer's report, because I have not all these cases well in mind. The only case other than that which I have referred to which has been instituted and has made substantial progress since the present construction of the act has been recognized by the Commission, which has been, say, for the last four years, is what is called the the Chicago Live Stock Terminal Charge case. In that case the Commission declared that terminal charges imposed by the Chicago yards upon live stock delivered to the stockyards were unjust and unreasonable, and ordered the roads to cease charging that rate. The circuit court on demurrer held that that was a proper order, as a matter of law that is, that it was within the jurisdiction of the Commission; that they could order an unreasonable rate to stop. When it came to the trial on the merits of the case, the court held that the rate was not unreasonable, and pointed out at considerable length that it was a very reasonable rate, and declined for that reason, on the merits, to enforce the order of the Commission.

Of course that order did not go into effect when the circuit court passed upon it. That case went to the circuit court of appeals, which affirmed the order of the circuit court, one of the three judges dissenting, and that case is now in the Supreme Court. Those are the only two cases which I now recall where the Commission was sustained. There is only one case where the Commissioners were finally sustained in the Supreme Court, which was the Social Circle case, and the other case in the Southern States-I believe it was in Alabama- was sustained by the circuit court, and that was overruled by the circuit court of appeals.

The CHAIRMAN. Is this case which you have just referred to the one that the Commission referred to as having taken away from them the rights to fix rates which they say previous to that time they had exercised?

Mr. HINES. The Social Circle case?

The CHAIRMAN. No, sir; this one of four years ago.

Mr. HINES. No, sir; that was, as I understand it, after the Supreme Court had made their decision, and proceeded on the lines which the Supreme Court has laid down as what the act means.

Mr. MANN. That went beyond any finding of the Supreme Court in that case?

Mr. HINES. What?

Mr. MANN. They went beyond any position that the Supreme Court had taken as to practice in the Chicago Stockyards case.

Mr. HINES. I only said in regard to that that they made that order,

which was construed to be lawful within their jurisdiction, and the court overruled it, although holding that it was a lawful order.

Mr. MANN. But the court held that the Commission did not have the right to fix rates?

Mr. HINES. No, sir; not in that case.

Mr. RICHARDSON. And even if they had, that they had usurped that right and were undertaking to fix ratesMr. HINES. Not in that case.

Mr. RICHARDSON. No; not in that case.

Mr. HINES. They were proceeding along the line which has been held by the court, that they can order the discontinuance of a rate which it unreasonable.

Mr. MANN. But when you come to the merits of the case, they did not think that the rate was unreasonable, and therefore the court did not sustain the order.

Mr. HINES. Yes, sir.

The record of the Interstate Commerce Commission in enforcing its orders in court seems to be about as follows:

K. and I. Bridge case: Overruled by circuit court, and no appeal. (37 Fed., 567.)

I. C. C. v. B. and O.: Overruled by circuit court (43 Fed., 37) and by Supreme Court (145 U. S., 263).

I. C. C. v. T. and P. Ry. Co.: Sustained by circuit court (52 Fed., 187) and circuit court of appeals (57 Fed., 948); overruled by Supreme Court (162 U. S., 197).

I. C. C. v. C., N. O. and T. P. Ry. (Social Circle case): Overruled by circuit court (56 Fed., 925); overruled by circuit court of appeals as to rates from Cincinnati to Atlanta, which the Commission made, but sustained as to the Social Circle long and short haul order; no opinio by circuit court of appeals; position of that court sustained by Supreme Court (162 U. S., 184), which also held in that case that the Commission had no power to make rates.

I. C. C. v. Detroit, etc., Ry. Co.: Sustained by circuit court (52 Fed., 1005); overruled by circuit court of appeals (74 Fed., 803) and by Supreme Court (167 U. S., 633).

I. C. C. v. D., L. and W.: Overruled by circuit court (67 Fed., 724). I. C. C. v. Ala. Mid. Ry.: Overruled by circuit court (69 Fed., 227) and circuit court of appeals (74 Fed., 715) and by Supreme Court (168 U. S., 144).

Behlmer v. L. and N.: Overruled by circuit court (71 Fed., 835); sustained by circuit court of appeals (83 Fed., 898), one judge dissenting; overruled by Supreme Court (169 U. S., 644).

I. C. C. v. L. and N.: Overruled by circuit court (73 Fed., 400); appealed to the circuit court of appeals and there dismissed by the Commission.

I. C. C. v. N. E. R. Co.: Overruled by circuit court (74 Fed., 70) and by circuit court of appeals (83 Fed., 611).

I. Č. C. v. Lehigh Valley Ry.: Overruled by circuit court (74 Fed., 784).

I. C. C. v. C., N. O. and T. P. (maximum-rate case): Overruled by circuit court (76 Fed., 183). Question certified by circuit court of appeals and the Commission again overruled by Supreme Court (167 U. S. 479).

I. C. C. v. W. and A. R. Co.: Overruled by circuit court (88 Fed.,