Millers, the Wisconsin Cheese Makers, the Wisconsin Retail Hardware Dealers, and the Wisconsin Lumber Dealers.

These organizations represent, as you will observe, nearly all of the various branches of trade and manufactures.

Of the local organizations in the various States there are 49, covering 21 States, the States being California, Colorado, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Nebraska, and New York, with about 10 associations, North Carolina, Ohio, Oregon, Pennsylvania, Washington, and Wisconsin.

There are numerous organizations which have passed similar reso lutions, of which, as chairman of the committee, I have heard incidentally but have not been officially informed, in addition to these that are mentioned, which aggregate in all 74.

I will say, also, that the States of Minnesota and Iowa have passed resolutions recommending the passage of the bill during the past winter, and during the previous winter the States of Michigan, Wisconsin, Kansas, Louisiana, and South Dakota-the legislatures of those States passed resolutions recommending the passage of the Cullom bill, then pending in the Senate, the principal provisions of which coincide with those contained in this bill.

The CHAIRMAN. Now, what is the objection that you find in the present legislation, and what are the remedies which you propose? State them briefly to the committee, if you please.

Mr. BACON. The brief time which remains this morning will hardly afford opportunity to go into the merits of the bill.

The CHAIRMAN. We propose to continue these hearings right along, every day, and that will give you an opportunity to finish.

Mr. BACON. It will be very difficult, in the fifteen minutes now remaining, to give even a comprehensive idea of the difficulties and the reasons for the enactment of this bill. I, however, at a subsequent meeting, will take that up definitely and concisely with the committee. At this time I think that I will only present the public demand which exists for this legislation.

The convention of which I speak appointed this committee for the purpose of promoting this legislation, or, originally, promoting the passage of the Cullom bill. That bill was far more comprehensive, far more drastic, than the bill which has been framed by this committee. The committee in considering and framing a new bill aimed to provide only for two or three vital matters that are necessary to give effectiveness to the present act, leaving minor details to future action, and concentrating all efforts upon these two or three vital provisions, without which, in the opinion of the committee, the present act is almost worthless.

The provisions which are referred to are, in the first place, the giving of the Commission specific authority to prescribe the proper rate to be enforced in the future, when, after full investigation, upon a formal complaint, it finds, after hearing all parties in interest, the existing rate or practice is unjust or unreasonable. That is the primary provision of this bill.

And the second provision, which is considered of equal importance, however, is that the rulings and decisions of the Commission shall be immediately operative, and shall so continue until overruled by the courts, or at least that they shall be operative at a time fixed in the

order of the Commission unless appeal is taken to the courts, and in that case their operation is suspended for thirty days, and if, upon examination of the record, the court is satisfied that the decision of the commissioner proceeds upon an error of law, or is unreasonable upon the facts, it may suspend the operation of such decision during the pendency of the proceedings. In any case, however, the order of the Commission, it is intended, shall be immediately operative.

The reason, the necessity for that, arises from the fact that under the present law the operation of the order of the Commission is suspended until it has passed through various stages of litigation which, according to the statements of the Interstate Commerce Commission, has averaged in the various cases which have been taken before the courts a period of four years. It is evident to anyone familiar with traffic affairs that when a rate or practice has been found unjust or unreasonable by a competent body, such as we believe the Interstate Commerce Commission to be, if that action has to be suspended for a period of four years, or even for a period of two years or one year, the occasion has passed by for deriving any benefit from the action of the Commission, and it practically nullifies whatever action the Commission may take. It suspends its action for such a period of time that it is entirely valueless."

Mr. ADAMSON. You wish to authorize and require the Commission at a certain stage of the investigation to prescribe rates?

Mr. BACON. Yes, sir; and that stage is after a complete investigation. Mr. ADAMSON. At some point you want them to fix rates?

Mr. BACON. Yes, sir. The term "fix rates," however, is hardly correct. We should say to revise the rates, to correct the rates, to prescribe the rate in a particular case which is to be enforced in the future.

Mr. ADAMSON. You want to fix the rates which they agree upon and conclude this rate?

Mr. BACON. Yes, sir; to be sure, in that particular case. Their authority in this bill in that direction is limited to the particular case in question, and can only be exercised in case of a formal complaint having been filed.

Mr. ADAMSON. Do you think that the Government of its own motion, arbitrarily, without requests from railroad companies, can justly fix rates and still escape responsibility for any results, for any loss that results?

Mr. BACON. I do not quite catch your question.

Mr. ADAMSON. If the Government arbitrarily assumes to fix the rates of the railroad corporations, quasi public corporations, do you think the Government can do that and still escape the responsibility if a loss results to the company?

Mr. BACON. We do not propose to have the Government fix the rate arbitrarily. We propose simply to have that provision in regard to the rates in the case of a complaint by the injured party. It is put before the Commission and the case considered. The testimony of both sides is taken, and they pass upon that rate as to whether it is reasonable and just or not, and, having passed upon it in respect to the past, then they shall proceed further and say what would be in their judgment a reasonable and just rate for the future.

Mr. ADAMSON. If the parties do not request it or consent to it, then would not the action of the Government be arbitrary

Mr. BACON. Not at all; any further than it might be said that the action of any court is arbitrary. The Commission is a tribunal before which both parties appear, each presenting its own case. The shipper

Mr. ADAMSON. It is not unusual in any court of this country, is it, for the court to undertake to decide what rates shall prevail with any company or private party for the use of their property?

Mr. BACON. The court, as I understand, has not the power to prescribe a rate for the future. The power of determining the rate is lodged in the legislative body. The Commission is a body organized by the legislative body for the purpose of exercising that function. It is beyond the power of the court to fix a rate.

Mr. ADAMSON. You have no trouble about the proposition as to the power to clothe the Commission with judicial powers? You are willing to that?

Mr. BACON. It can hardly be called a judicial power. Judicial power does not permit of the fixing of a rate in the future. The power to fix a rate is a legislative power, and the only remedy

Mr. ADAMSON. The Commission would have to exercise judicial power in the precedent investigation before fixing the rate?

Mr. BACON. Not judicial power. It comes through the investigation in a judicial manner and in judicial form, but the Commission is not a judicial body and has no judicial powers conferred upon it, and we do not propose to confer any upon it. We propose, simply, to clothe it with power which will enable it to protect the public in the case of the rates being found unreasonable or discriminative, not only against the continuance of that rate, but also to prescribe what rate shall be substituted for it in the future. That is a legislative act, or an administrative act, I should say.

Mr. MANN. Now, on that point, your idea is that the Commission should have the power to fix a rate which should be enforced until the courts determined otherwise?

Mr. BACON. That is the proposition.

Mr. MANN. Do you think the legislature anywhere has that power to prescribe a rate for railroads which must be accepted by the railroads until the courts determine it is illegal?

Mr. BACON. That right has been affirmed repeatedly by the courts within the last twenty years.

Mr. MANN. I think to the contrary.

Mr. BACON. Yes, sir; according to my information.

Mr. MANN. They can fix the rates, but the railroads have a right to appeal to the courts at once.

Mr. BACON. They have a right to appeal to the courts, and so they have under our proposition.

Mr. MANN. Under your proposition they have got to accept the decision of the Interstate Commerce Commission.

Mr. BACON. Temporaily, while it is pending.

Mr. MANN. You say it makes it of effect. They have to accept the decision of the Interstate Commerce Commission for, say, four years time.

Mr. BACON. No, sir. The carrier has a right to proceed immediately to obtain a reversal of the Commission.

Mr. MANN. Through the Supreme Court of the United States, which you say requires on the average about four years' time to obtain a decision from.

Mr. BACON. Yes, sir; that has been the case heretofore; but it is generally understood that those cases have been delayed purposely by the carriers, for the reason that as long as they could continue the existing rates in force, the act of the Commission being inoperative, they could derive the benefits as long as they could keep the case in the court.

Now, under the proposed amendments it would be to the interest of the carriers to expedite the adjudication of the case, and it is altogether probable that it would not take so long a time, four years, and probably not more than one year, to reach a result.

Mr. ADAMSON. What procedure do you suggest in case of an erroneous rate? Do you propose the other courts attacking this Commission, or do you propose an appellate jurisdiction?

Mr. BACON. It is an appellate procedure. That is, the carrier if it is dissatisfied with the rates shall appeal it to the circuit court. Mr. ADAMSON. From the Commission to the circuit court?

Mr. BACON. From the Commission to the circuit court.

Mr. COOMBS. Now, let me ask you this question: Supposing, for the sake of argument, that the Commission promulgated an order of some kind, and supposing that it was radically wrong. Now, the railroads would have to abide by that until they could get a judicial determination of it. Now, would that not, conceding that it was wrong, and conceding that they were compelled to do it, pending the decision of court, would that not be an invasion of their rights under the Constitution and under the laws of this country?

Mr. BACON. The presumption is altogether in favor of the correctness of the decision of the Commission.

Mr. COOMBS. No; I am not talking about the presumption. I am talking about this

Mr. BACON. Excuse me. I will lead up to the reply to that question. Mr. COOMBS. Yes.

The

Mr. BACON. The Commission consists of men who are expert in traffic matters-men who have become expert from experience. members are appointed for the period of six years, but the practice has been to reappoint them from term to term, so that the body becomes practically as permanent a one as the Supreme Court of the United States, or very nearly so.

And it requires such knowledge, intimate knowledge, of traffic affairs and the intricacies of rate making, that after it has given a hearing to both parties, and that hearing, by the way, is always a protracted one and every one appears who is in any way interested in the question, and the rate is investigated in every way, in its relation to other points, and everything related to it in any way is investigated, and, as I say, the presumption is ten to one that the decision is correct; and while there may appear to be a little injustice in making that decision immediately operative, while its correctness is pending in the courts, on the other side, you can see that the injury or wrong coming from the suspension of the orders of the Commission is infinitely greater than any wrong that can be sustained from any probable error of the Commission in fixing the rates.

There is a balance, a balance of results, and it is fair to the public and fair to the railway company that that balance should be considered and the preponderating wrong and injustice which is continued and enforced while these cases are held in court is infinitely greater than

the slight loss which may, in one case in a hundred, possibly, result from the orders on the part of the Commission.

Mr. RICHARDSON. You admit that the rule which it prescribes reverses the rule which prevails in all the courts of this country? Mr. BACON. I admit that, and I will say in reply to that, that the circumstances are entirely different.

Mr. MANN. Before you are through with your argument I hope you will address yourself to the power of the legislative body to say that the court shall not exercise its authority at a preliminary hearing-as to whether the legislative body has the power to fix a rate and to say that rate shall be observed until the final decision of the Supreme Court of the United States overrules entirely the theory of the judicial power that has the right to issue an injunction against an improper

rate.

Mr. BACON. I can cite you decisions showing beyond doubt that the power rests with the legislative body; but, as you suggest, there is opportunity of appeal from one court to another until it is finally decided by the Supreme Court.

Mr. MANN. If you can find any decision to the effect that the legislature of a State can fix a rate, and that that must be observed until the Supreme Court of the United States says otherwise, I would be very glad to see it.

Mr. BACON. There is a question of the rights of the people

Mr. COOMBS. One individual is the people. Now, you take judgment against John Doe. John Doe appeals, and that judgment is challenged. Now, are you going to provide a law for the execution of that judgment pending the appeal which he may take?

Mr. BACON. That brings me to the question which this gentleman put. In case of business transactions which come before the court there are two parties to the transaction, and those two parties are the only ones interested, and each may protect himself in the case of an appeal by filing a proper bond, and the final decision of the court will be carried out in that individual case.

Mr. ADAMSON. You propose to carry it out pending the appeal? Mr. BACON. Excuse me, it will be carried out in that particular case, and the two parties, who are the only ones interested, will get justice. In the case of the railroads the party, the man, who bears the freight ultimately is not the one who pays it. The one who pays it is a middle man, and he distributes that between forty or fifty or one hundred individuals who are not known and who can not be reached, and who are really the parties in interest. That fact renders it necessary that there shall be special legislation protecting these parties who are the real sufferers and can not protect themselves, who have no standing in court, and must continue paying these excessive charges, charges found to be excessive by a competent body, from year to year, until the final result is reached.

The CHAIRMAN. The time for adjournment of the committee has arrived.

Mr. BACON. I should be very glad to continue at the next hearing. The CHAIRMAN. Very well.

Thereupon, at 12 o'clock meridian, the committee adjourned until to-morrow, Wednesday, April 9, 1902, at 10.30 o'clock a. m.