the President of their necessity as a war emergency measure, the power to condemn land for rights-of-way, upon a further certification by the President or approval by the President of the condemnation to be made. That act, as I said, was a war emergency measure. It was intended to expire on June 30, 1943. On that date Congress extended the act to expire June 30, 1945. Now, during the course of those hearings there was a good deal of agitation for including natural-gas pipe lines. Senator Stewart was importuned by some of his constituents in Tennessee to introduce an amendment which would specifically include natural-gas pipe lines. He stated on the record and discussed during the course of the hearings an intention to introduce such an amendment, but the proposal met with a great deal of opposition and the principal motive, I think, for abandoning the idea of amending it, was not altogether the opposition but rather that that opposition might tend to delay the passage of the oil pipe-line bill, which was considered to be of extreme importance at that time. So this committee, then having that under consideration, heard quite a considerable amount of evidence on both sides and rejected the idea of putting a natural-gas pipe line under a Federal law which would grant them the power of eminent domain. Now, without having gone into the subject to make a study of it, there are certain elemental factors which I think should be called to the attention of the committee at this time, because I believe that first there has not been a great deal of consideration given to either S. 1028 in the Senate committee nor to the corresponding bill in the House committee. They were both introduced at dates substantially later than the Rizley bill, and the other companion bills were introduced in both bodies. In the House hearing Representative Schwabe appeared and said that he had this bill and explained it briefly and said there was no opposition it it. He said it had been submitted to the Federal Power Commission and that he was filing a brief for it. That was the entire discussion of that bill before the House Committee until it came to where a representative, the young lady that Mr. Rizley referred to, was asked her view on it and she stated she had not had time to consider it. She represented the mayors' conference, so-called, and also the legal officers in municipalities throughout the country. And the chairman assured her she would have another 2 weeks at least to consider and make whatever comments she cared to on that bill. Now, there has been no statement made here with respect to it this morning except this colloquy by the chairman of the committee and the chairman of the Federal Power Commission, and, as I understand it, the Federal Power Commission has merely stated that the language of the proposed act corresponds with that to be found in the Federal Power Act, and that the Commission has no objection to it. Well, in the first place, the power of eminent domain is essentially a sovereign power inherent in the States. I think the Congress should be slow to take that power away from them. Let me say this: the right to condemn property under eminent domain statutes is granted to privately owned public utilities primarily because of the essential function it is to serve, for the general public. Now, pipe lines are characterized as public utilities under the statutes of some States, and they are not so declared to be by statutes of other States. The courts are divided on it generally, but generally it is held that natural-gas pipe-line transmission companies are not public utilities, they do not serve as common purchasers in the field which might give them some characteristics that appertain to public utilities. They do not serve general consumers in the distributing areas except with few exceptions where transmitting pipe-line companies also operate the distributing system. They are merely a medium of carriage between the producing end and the consuming end. Now, in order to obtain the right of eminent domain in any States or to exercise it, a pipe-line company would have to be subject itself and be willing to give gas service in that particular State under existing State laws. Under this proposal a pipe-line company, and I hope Senator Stewart will look at this, a pipe-line company could pass through the State of Tennessee to the Appalachian area or the Atlantic seaboard without putting off a cubic foot of gas in that State and the State would have no control over it as to whether or not it could condemn property for its right-of-way. It would have been taken away from them by this particular bill. Now, as I stated, the objection to that bill was rather intense before this committee when it was up in 1941. I think the absence of opposition today is due to two very simple factors. First, in the hearings which concluded before the House some 10 days ago or thereabouts, it was understood that the subject would be taken up at a later hearing. The notice of this hearing was not, as far as I know, published in the Congressional Record, and I believe that is true. Senator MOORE. Yes, that is true. Mr. McGRATH. I learned of this merely by accident, as it were. I do not believe any of my clients were notified. Senator MOORE. I will say this, Mr. McGrath, do not be apprehensive that there is going to be any effort here to push this bill on through. This is the first time I have heard anyone have a desire to be heard in opposition to the eminent domain statute as proposed here. Mr. McGRATH. Senator, I just wanted to give you some of the basic conflicts that lie in that bill and to assure you that there will be opposition to it. Senator MOORE. Well, we will afford the opposition an opportunity to be heard. Mr. McGRATH. All right, sir. Thank you. Senator MOORE. Thank you, Mr. McGrath. Is there anyone else here that has a statement to make or to file? If that is all, then the committee will adjourn. (Thereupon, at 12:59 p. m., an adjournment was taken to meet at the call of the chairman.) AMENDMENTS TO THE NATURAL GAS ACT TUESDAY, JULY 1, 1947 UNITED STATES SENATE, SUBCOMMITTEE OF THE COMMITTEE ON Washington, D. C. The subcommittee met at 10 a. m., pursuant to call, in the Interstate and Foreign Commerce committee room, United States Capitol, Senator E. H. Moore, chairman of the subcommittee, presiding. Present: Senator Moore and Senator Stewart. The other member of the committee, Senator Capehart, has been notified, and I assume he is not going to attend. This meeting has been called to give Miss Alpern an opportunity to testify at the request of Senator Myers, and I suppose that you know that the only testimony that has been taken before this committee is the testimony of the Federal Power Commission, and the summation of the testimony taken before the House Interstate and Foreign Commerce Committee, which has been adopted here as the testimony. However, because of the request of Senator Myers, we will give you an opportunity to testify, probably in addition to what you have already testified to before the House committee. We have opened up this hearing for this purpose. STATEMENT OF ANNE X. ALPERN, CITY SOLICITOR OF PITTSBURGH, PA., REPRESENTING THE UNITED STATES CONFERENCE OF MAYORS AND THE NATIONAL INSTITUTE OF MUNICIPAL LAW OFFICERS Miss ALPERN. Thank you very much, Senator. If the committee please, I am here representing the National Institute of Municipal Law Officers and the United States Conference of Mayors. My name is Anne X. Alpern, and I am solicitor for the city of Pittsburgh, Pa. I am also vice chairman of the committee on gas and electric rates of the National Institute of Municipal Law Officers, and have been vice chairman for the past 3 or 4 years. I am here in behalf of the various municipalities throughout the United States, because we consider this legislation of utmost importance to the consumers of gas in this country. The United States Conference of Mayors is composed of over 200 cities, practically all of the major cities in the United States; and the National Institute of Municipal Law Officers is composed of the member cities throughout the United States, represented by their various law officers and city 64758-47- -6 77 attorneys of those cities. There are 463 cities represented by the National Institute of Municipal Law Officers. Our cities, through these particular organizations,, are concerned largely with problems that affect municipalities. We exchange our views for the purpose of advising ourselves on current problems, and we also express a point of view on issues which we think are relevant and pertinent to the cities that we represent. That is, of course, why we are here in connection with the amendments to the Natural Gas Act. Senator MOORE. You testified before the House committee, and I have read your testimony that you gave there. Do you intend to supplement that? Miss ALPERN. I intend to supplement my testimony, and I would not bore you by repeating. There have been some facts developed since my testimony was given that I think are of the utmost importance in the consideration of these amendments. Senator MOORE. That is the court decision, I assume. Miss ALPERN. That is the decision of the Supreme Court of the United States in Interstate Natural Gas Co. v F. P.C. on June 16, 1947; but in order to lead up to the impact of that decision and its implications, I think it is entirely necessary to review some of the problems presented by this legislation and what is sought to be done by these amendments. May I begin by stating that these amendments represent the concerted efforts of the pipe-line companies and their affiliates? These pipe-line companies have mobilized in a way that has not been done, I think, in a decade, for the purpose of scuttling the Natural Gas Act. Since the cities requested by the city solicitors throughout the United States have enjoyed the advantages of the Natural Gas Act, we naturally have a real interest in this controversy. During the period that has elapsed, of 9 years, since the enactment of the Natural Gas Act, reductions to consumers have totaled over $150,000,000. That represents a very substantial saving to those people that we represent throughout the United States. For that reason we are zealous in urging the Senate to continue an act which has served so useful a purpose; and we are anxious to point out the motivation of the amendments that have been suggested by the pipeline companies throughout the United States. The control and regulation by the Federal Power Commission, and I have had some experience, because we in Pittsburgh have had litigation there involving our own gas companies, has been in our opinion of the highest order. The members of the Commission have been men of great integrity, and they have attempted to administer this act in a way that will serve the public and will give an honest and fair return to the pipe-line companies and to the gas companies. That has been accomplished, as the record will show. It is significant that a great many of the reductions that have been achieved in the natural-gas field have been achieved by applicable adjustment and settlement rather than by litigation, which would seem to indicate that the companies themselves recognized the high rates they were charging and the need to reduce them, once a contest was begun. Now, what is it that these acts attempt to do? The Rizley bill and the companion bill that has been introduced in the Senate, what do they try to do? They purport to make certain clarifications which will con fine the Federal Power Commission to the field that was intended by our Congress when the Natural Gas Act was passed. But it is our sincere and earnest belief that the motivation, not the expressed motivation, and the real desire on the part of the natural-gas and pipe-line companies is not to clarify, but to confuse this gas picture in such a shape and such a fashion that rates throughout the country will be increased, and greater profits, undue profits, will be enjoyed by the pipe-line and gas companies throughout the country. The gravamen of their complaint to the House and Senate has been that the Natural Gas Act was never intended to control independent consumers, producers, and gatherers of gas and the fallacious interpretations of the Federal Power Commission and of the United States Supreme Court have subverted this original intention. It is our position that the Federal Power Commission has consistently recognized the limitations upon their jurisdiction over independent producers, and that the fear that has been expressed is a synthetic and manufactured fear and not an actual fear of improper regulation. Recently the United States Supreme Court handed down a decision in the Interstate Natural Gas Co. case, and as a result of that decision, all the forces which had been arrayed against the Natural Gas Act found a new platform on which to broadcast their objections. It is claimed that as a result of this decision, the act must be clarified and amended so that the powers of the Federal Power Commission will be curtailed. I think it is of utmost importance for us to examine the decision that was made by the United States Supreme Court and the effect and impact of that decision on the natural-gas industry. The decision in the Interstate case was predicated upon facts of that particular case. Laymen have a way of emasculating certain sections of an opinion and piecing it together in a quilt, a patchwork quilt, and calling that the opinion of the court. But that is not the way opinions are written in any court in the land. Opinions are based on the facts of the particular case before the court. They go no further than the facts involved, and, therefore, the facts of the Interstate case are of prime importance in determining the decision of the Court in that case. There, we had not an independent producer and gatherer, but we had a company that was part of the largest group of producers in the State of Louisiana, controlling the major portion of the Monroe fields. We also had a producer who was dealing with an affiliate, among others, in those involved in the case. We had a producer not solely interested in producing and gathering, and we had a producer who had been engaged in interstate commerce prior to the time of the sales. These distinctions are not without moment in what I am discussing, because they indicate why the Court in this case reached the decision that it had not reached in other cases before the Court. I would like to call to your committee's attention the Columbia Fuel case, which was the first case involving independent producers. In that case the Federal Power Commission held that there was no jurisdiction over independent producers and gatherers of gas. Now, remember, this was not an antagonistic position of the Federal Power Commission, but the Commission adopted of its own instance the interpretation of the Natural Gas Act. That was the Columbia Fuel case. |