In view of the fact that transportation agencies such as the National, which engage in interstate commerce, are required by acts of Congress and by other applicable laws to accept the type of commerce which they hold themselves out to carry, I submit that it is unreasonable to impose upon such agencies the duties contemplated by S. 3357, or the penalties and fines which would result from failure on the part of the transportation agency. It is obvious that it would be difficult, if not impossible, to expect agents of transportation companies to ascertain in advance whether a particular gambling device would be legal in particular States before it accepted such a device for transportation. Moreover, the provision which requires a certification from the governor of the State in which a device may be legally used before its use is made legal under the bill is impossible of fulfillment. The governor of the State might for reasons of his own refuse to make such a certification, even where the laws of the State permit the use of particular so-called gambling devices. For the reasons stated, I suggest that before the bill in question is adopted by Congress, it should be amended to exempt any carrier or freight forwarder regulated by the Interstate Commerce Act from the penalties and fines imposed and from the duties imposed by section 2 of the act with respect to the laws of the States and certifications from the governors of the States where such carriers or forwarders accept mechanical devices which might be used for gambling purposes in good faith and in the regular course of business. In the Food and Drug Act (21 U. S. C. A. 373); in the Agricultural Seeds Act (7 U. S. C. A. 1573); and in an act dealing with woolen products (15 U. S. C. A. 68a), which laws contain certain prohibitions against the transportation of particular kinds of commodities under the conditions therein set out, provide that carriers shall not be subject to the penalties and fines therein imposed where they accept and transport such commodities in the regular course of business and as a part of their carrier functions. STATEMENT OF ROLAND RICE, ASSISTANT GENERAL COUNSEL, ASSOCIATION OF AMERICAN RAILROADS My name is Roland Rice and I submit this statement on behalf of the Association of American Railroads. That association is, I believe, well known to your committee. It is a voluntary organization which includes in its membership companies representing over 95 percent of the class I railroad mileage of the country, and having more than 95 percent of the total class I railroad revenues. I am filing this statement to express the views of the association respecting S. 3357 which was passed by the Senate on April 19, 1950, and H. R. 8350, an identical bill, introduced on May 3, 1950. We offer no opinion concerning the merits of these bills, hereinafter mentioned in the singular, but we do strongly urge the inclusion of language that will clearly exempt carriers from the penalties provided. Section 2 makes it "unlawful knowingly to transport or cause to be transported in interstate or foreign commerce any gambling device, or knowingly to take, receive, possess, or dispose of any gambling device transported in violation of this act: Provided, That the provisions of this section shall not apply to the course of unbroken interstate transportation of any gambling device into any State where the use of such device is legal, as certified by the governor of the State to the Attorney General of the United States and published by the Attorney General in the Federal Register. In the absence of such certification and publication, the use of gambling devices in any State shall, for the purposes of this act, be presumed to be illegal; * * The quoted provisions of section 2 would impose an intolerable burden upon railroads and their employees and fasten upon them the role of police for the enforcement of the proposed legislation. While the railroads have no desire to transport gambling devices in violation of law, the bill as drafted, and S. 3357 as passed by the Senate, would make railroad employees the judge of whether a particular shipment is permitted or prohibited. Any railroad employee responsible for movement of a shipment would be required to determine whether it contained a gambling device as defined in the bill. Upon being satisfied that it did, he would next have to know whether it was being shipped to a State where the use of such a device is legal; and he must also know whether the governor of that State had so certified to the Attorney General; and finally, whether this certification had been published in the Federal Register. If he could satisfy himself on all these points, he could proceed with the handling of the goods if, as the section says, they were in the "course of unbroken interstate transportation." Presumably, he would be required to know also what is meant by "unbroken interstate transportation," and that the shipment would move in this manner over its complete journey. In addition to ascertaining the States where the use of gambling devices its legal, and learning that publication of the governors' certification had been made in the Federal Register, the railroads and their employees would be required also to know the States in which use of the gambling devices is illegal. Under the terms of the bill this would include States as to which there was no certification and publication of legality of use. Any shipment made to these States would be prohibited, and subject to penalties provided in the bill. If it be said that a railroad or its employees would be liable only in case they knowingly transport or cause to be transported the gambling devices, a question of proof of knowledge immediately arises. If the employees had no knowledge of the unlawfulness, they could not be of much assistance in the enforcement of the law. On the other hand, if as the bill provides, they were charged with the duty of knowing the legal status of gambling devices in all instances before acting, the burden of acting at their peril would be grossly unfair. When it is remembered that many thousands of railroad employees in all sections of the country would be involved, the difficulty of keeping all these men currently informed and alert to this new and added responsibility becomes apparent. Attention must be directed also to section 5 of the bill which would, among other things, make unlawful the transportation, possession, or use of any gambling device in the District of Columbia, the Territories and possessions of the United States, or on other lands under Federal jurisdiction. Every objection raised to section 2 is raised respecting section 5 so far as railroads are concerned, with the added consideration that in section 5 the word "knowingly" is omitted. In other words, in the District of Columbia, and in the other places included in this section, a carrier would be liable for transporting gambling devices even though he was totally unaware of the identity of what was being transported. If a shipper of prohibited gambling devices sought to move them he would hardly identify them properly and thus make his prosecution easier. Under these circumstances a railroad should not be made liable for transporting a device which the shipper improperly marked or identified, and which the carrier therefore had no means of identifying, or reason for doing so. But there is still another difficulty involved, and it appears in section 1, in the definition of "gambling device." Such a device, according to the bill, "means any machine or mechanical device, or parts thereof, designed or adapted for gambling or any use by which the user as a result of the application of any element of chance may become entitled to receive, directly or indirectly, any thing of value." In order to determine whether a particular shipment is covered by this section the carrier would be called upon to decide whether it falls within the classification described. We will not labor the point, for it is clear that what is "designed or adapted for gambling" or what may eventually be used by someone in a manner which may entitle him "to receive, directly or indirectly, any thing of value" is subject to varying interpretations and endless differences of opinion. The objection which the railroads find in S. 3357 could be overcome by the addition of language designed to remove carriers in the ordinary course of their business from the terms of the bill. This could be achieved by adding, at an appropriate place, a new paragraph as follows: "This Act shall not apply to any common or contract carrier with respect to gambling devices transported or delivered for transportation by such carrier in the ordinary course of its business as a carrier." Congress has already recognized the fairness of the principle urged here, and has given expression to it in legislative enactments. In the 1939 Federal Seed Act, section 1573 exempts carriers from section 1571 which makes certain transportation of seed unlawful, and from section 1572, which requires certain records to be kept. To achieve the exemption, the following language is used: "(a) The provisions of sections 1571 and 1572 of this title shall not apply to any carrier in respect to any seed transported or delivered for transportation in the ordinary course of its business as a carrier: Provided, That such carrier is not engaged in processing or merchandising seed subject to the provisions of this chapter * * (7 U. S. C. A. 1573). Again, in 1940, in the statute involving the misbranding of woolen goods Congress exempted carriers in the following language: "This section shall not apply "(a) To any common carrier or contract carrier in respect to a wool product shipped or delivered for shipment in commerce in the ordinary course of its business; * * *" (15 U. S. C. A. 68a). In the Food and Drug Act, in 1938, after declaring certain practices unlawful and after requiring the carriers to give access at reasonable times to their records respecting the movement of foods and drugs, Congress added a clause reading: 66 * * * Provided further, That carriers shall not be subject to the other provisions of this chapter by reason of their receipt, carriage, holding, or delivery of food, drugs, devices, or cosmetics in the usual course of business as carriers" (21 U. S. C. A. 373). In view of what has been said herein with respect to the hardship that would result to carriers from the operation of the provisions of the bill, and in the light of the recognition given carriers in similar or related situations in the past, we urge the inclusion, at an appropriate place, of language such as that suggested to be added, as follows: "This Act shall not apply to any common or contract carrier with respect to gambling devices transported or delivered for transportation by such carrier in the ordinary course of its business as a carrier." STATEMENT SUBMITTED BY THOMAS J. MCCLOY, PRESIDENT, NATIONAL The following statement was filed with the House Committee of Foreign and Interstate Commerce: "H. R. 6736 and S. 3357 now for consideration before your committee will practically destroy the benefits now enjoyed by veterans' groups, churches, clubs, and other charities who conduct affairs annually for the raising of finances to carry out their rehabilitation and charity projects. "The National Veterans Council is unalterably opposed to this legislation and wishes to be so recorded. "I wish to remind you that the Attorney General of the United States admitted that his office could not honestly say that they know of any great syndicate presided over by any one individual." We would like to know if this means that the members of the American Legion, Elks, Moose, Eagles, Knights of Columbus, and others, who have socalled slot machines and other types of devices used for friendly games are criminals; or by using these machines in their club houses contribute to crime? It seems to me that the organizations are being made the scapegoat by someone who is seeking to cloak or camouflage the bill now before the Senate, requesting crime investigation. Again let me state our position, representing as we do all the veterans' organizations, that we are unalterably opposed to the two bills now before your committee as they are detrimental to the charitable work of millions of Americans and undemocratic in principle. I appreciate this opportunity for our organization to be recorded on this matter. FEDERAL TRADE COMMISSION, May 1, 1950. ELTON J. LAYTON, Esq., Clerk, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. My Dear Mr. LAYTON: This will acknowledge your letter of April 25, 1950, received at 11:05 a. m. April 27, advising that there will be a meeting of your committee at 10 a. m., Thursday and Friday, April 27 and 28, 1950, to begin public hearings on S. 3357 and H. R. 6736-bills to prohibit the transportation or receipt of gambling devices (slot machines) in interstate and foreign commerceat which time the Government departments will be heard. You also advise that on Tuesday and Wednesday, May 2 and 3, proponents will be heard and on Thursday and Friday, May 4 and 5, opponents will be heard. We are requested to advise if we wish to appear as a witness or file a statement for the record for or against the proposed legislation. In reply to your letter we wish to advise that the Commission does not desire to have a representative appear as a witness or file a statement for the record for or against the proposed legislation. In this connection, however, we wish to advise that as requested by the chairman of your committee, the Commission reported on January 31, 1950, on H. R. 6736, Eighty-first Congress, Second session, to your committee. The Commission has been requested by the Senate Committee on Interstate and Foreign Commerce to report on S. 3357, Eighty-first Congress, second session, and its report thereon, in the form of a letter addressed to the chairman of the committee, has now been cleared through the Bureau of the Budget. A copy of this report is enclosed. By direction of the Commission, Sincerely yours, Hon. EDWIN C. JOHNSON, JAS. M. MEAD, Acting Chairman. Chairman, Committee on Interstate and Foreign Commerce, United States Senate, Washington, D. C. MY DEAR MR. CHAIRMAN: This is with further reference to your letter of April 7, 1950, enclosing a copy of S. 3357, Eighty-first Congress, Second session, a bill to prohibit transportation of gambling devices in interstate and foreign commerce, as introduced by you on April 4 (legislative day March 29), 1950, and requesting any comments the Commission may care to offer concerning this proposed legislation. In response thereto I wish to advise that the bill does not purport to amend any of the acts or statutes administered by this Commission and, if enacted, would not affect its duties and functions. However, in studying the measure, consideration has been given to the power of Congress to pass such legislation in the exercise of its authority to regulate interstate commerce. It is our opinion that "Congress is free to exclude from interstate commerce articles whose use in the States for which they are destined it may reasonably conceive to be injurious to the public health, morals, or welfare, or which contravene the policy of the State of their destination" (United States v. Carolene Products Co., 304 U. S. 144, 147). Again, “Congress can certainly regulate interstate commerce to the extent of forbidding and punishing the use of such commerce as an agency to promote immorality, dishonesty, or the spread of any evil or harm to the people of other States from the State of origin. In doing this it is merely exercising the police power, for the benefit of the public, within the field of interstate commerce" (Brooks v. United States, 267 U. S. 432, 436). In the Lottery case (188 U. S. 321) it was held that Congress might pass a law prohibiting the carriage of such tickets from one State to another. By direction of the Commission. JAS. M. MEAD, Acting Chairman. INTERSTATE COMMERCE COMMISSION, Hon. ROBERT CROSSER, Chairman, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D. C. MY DEAR CHAIRMAN CROSSER: Your telephone request of May 1, 1950, requesting a report and comments on S. 3357, introduced by Senator Johnson of Colorado, "To prohibit transportation of gambling devices in interstate and foreign commerce," has been referred to our legislative committee. After careful consideration by that committee, I am authorized to submit the following comments in its behalf: The bill is so broad that it would establish a criminal liability on the part of any public carrier which transported machinery with knowledge of its intended use for the playing of any game of chance for money. While such knowledge would be an essential element of the crime and there might be difficulty in proving that element in a prosecution of a carrier, nevertheless carriers might be put to a considerable burden in trying to avoid possible prosecutions for viola tions of a statute worded as proposed in this bill. In other instances where Congress has prohibited movement of certain articles in interstate commerce the acts have been made expressly inapplicable to carriers. For example, in the statute involving misbranded woolen goods the following provision was included (15 U. S. C. 682): "This section shall not apply to any common carrier or contract carrier in respect to a wool product shipped or delivered for shipment in commerce in the ordinary course of business." We respectfully suggest that, in the event your committee should decide to report S. 3357, the following sentence be added to the bill: "This act shall not apply to any common carrier or contract carrier in rrespect to machinery shipped or delivered for shipment in commerce in the ordinary course of business." Respectfully submitted. Hon. ROBERT CROSSER, CHARLES D. MAHAFFIE, JOHN L. ROGERS. Acting Chairman, Legislative Committee. DEPARTMENT OF STATE, Chairman, House Committe on Interstate and Foreign Commerce, House of Representatives. MY DEAR MR. CROSSER: On the basis of the telephone request of your cormittee on April 28, 1950, we transmit herewith the report of the Department of State on S. 3357, to prohibit transportation of gambling devices in interstate and foreign commerce. "The Department is primarily concerned with the effect of the provisions of this bill on the foreign commerce of the United States. In this connection. it is assumed that the exception contained in the proviso in section 2 with respect to gambling devices being transported to any state where the use of such devices is legal, was also intended to apply to the importation of gambling devices. This matter could be clarified by the insertion of the words 'or foreign' between 'interstate' and 'transportation' in the proviso in section 2. It would also be desirable to clarify the effect of the bill on the export of gambling devices. This could be accomplished by the addition of the following lenguage to the end of the first sentence of the proviso in section 2 of the bill: 'or to the course of unbroken interstate_transportation of any gambling device for exportation to a foreign country.' In order to make clear that foreign manufacturers of gambling devices are not subject to the reporting requirements of section 3, it is suggested that the phrase 'in the United States' be added after the word 'devices' in line 21 of page 2 and in line 2 of page 3 of the bill. "These modifications would avoid any possible inconsistency with our general commercial policy and international commitments which might arise from an interpretation of the bill resulting in unjustifiable restrictions on foreign trade. With these clarifications, the Department would have no objection to the bill. "By reason of the urgency of this matter, we are transmitting this report without the clearance of the Bureau of the Budget." MY DEAR MR. CROSSER: Reference is made to the telephone request of your committee on April 28, 1950, for the views of the Department of State on H. R. 6736, to prohibit the transportation or receipt of gambling devices in interstate and foreign commerce, and for other purposes. From the point of view of economic foreign policy, the Department of State would have no objection to a complete prohibition on the transportation of gambling devices in interstate and foreign commerce as embodied in H. R. 6736. However, if there are to be any exceptions permitted, the comments of the Department in its report on S. 3357 would apply. |