would combine with others for the purpose of ousting those for the moment in power. Men who like to work for the joy of working or for the rewards from efficient labor even if not dismissed would resign from an organization where the rewards come only to those who intrigue.

It is not my intention to analyze the bill in detail. The question of taxation, however, deserves mention. The railroads owned by the Federal corporation can not be taxed by the States. Are the States ready to give up one of their principal sources of revenue? The proponents of the plan indicate a willingness to permit the States to tax the railroads for a while. But for how long will the employees be willing to permit from $150,000,000 to $200,000,000 to be abstracted from their wage fund?

A crisis is upon the country, a crisis which is going to grow during this year, although I believe that this plan will find less favor among the intelligent railroad employees than it has, although it is likely to find more favor among the less intelligent employees, and I conceive that we can not strike too quickly. It is fortunate that the issue is raised in a way that it can be met, for the defeat of this revolutionary plan will quiet agitation for its extension to other lines of industry. It is equally fortunate that this issue is raised before a Congress in which the members of both parties are standing firmly, courageously, fearlessly in defense of American institutions.

The CHAIRMAN. Is Mr. Morrow in the room?

Mr. Loos. He is not here, but I am to substitute for him. I was to go on with him.

The CHAIRMAN. Very well. Judge Sims wants to ask Mr. Rich a few questions. As soon as Mr. Morrow comes in please let me know. Mr. Loos. Yes, sir.

Mr. RICH. Mr. Chairman, may I just give the names of a committee which is here present in support of my remarks in opposition to the so-called Plumb plan?

The CHAIRMAN. Very well.

Mr. RICH. Mr. William P. Libby, traffic manager Plymouth Cordage Co., Plymouth, Mass.; Mr. Albert R. White, vice president Mount Hope Finishing Co.; Mr. Henry Brewer, vice president Winchester Repeating Arms Co., New Haven, Conn.; and Mr. John A. McDowell, of the American Woolen Co.

Mr. SIMS. Dr. Rich, I want to ask you a question or two, as this is a supplement to the hearing you have already had before the committee.

Does any plan that has been presented, except indirectly the Lenroot plan, look to the amortization of the capital either that is now in the companies or any which may hereafter be put in; that is, does any plan propose that the service of transportation shall be performed without cost on the invested capital?

Mr. RICH. Any plan that is now before the committee?

Mr. SIMS. Any plan except the so-called Plumb plan-is there any plan that proposes to reduce the capitalization; that is, amortize the present capitalization or any future capital investments and to render the service of transportation at cost of furnishing it: is there any other plan that makes any provision for anything of that sort except the Lenroot plan, indirectly?

Mr. RICH. I think that the plan introduced in the bill by Senator Cummins practically provides for transportation at cost. I have not examined all the bills, but there is no doubt of the fact that there are few bills which take care of the fundamental question which, I take it, is not so much what the shippers can pay as that they shall have adequate facilities. They are ready to pay what the service is worth. I do not think that many shippers believe that they are paying excess rates to any considerable extent because of so-called inflated capitalization.

Mr. SIMS. I am not asking you about those details. Of course, it is perfectly patent that if we are going to operate the railroads or any other industry with private capital there must be a sufficient inducement to get private capital to go in. Of course that profit, whatever it is, must be a burden upon those who pay for the service. Is there any plan that proposes any amortization of existing capital or amortization of any future capital or to render service for the cost of rendering it, except in the so-called Plumb plan?

Mr. RICH. I stated in my remarks, in so far as the question of taking over the railroads by the Government was concerned, that it did result in a saving, and that the saving would be, perhaps, 1 or 2 per cent. I doubt if it would be more than $200,000,000, but that is to be put on the credit side of the Plumb plan, or any plan that involves Government ownership.

Mr. SIMS. But no other plan proposes anything on that line. The basic principle of the Plumb plan is the operation of the railroads without profit and in the interest of the service. You have taken a great deal of time, legitimately and properly, to paint the awful horrors that will come to this country in case this plan should be adopted, although Congress is practically in session all the time and public sentiment is always active and present. You have said that if the Congress should first adopt the plan and then continue it it would bring the horrors to the country that you have pictured. Your alarm will not affect those who know how responsive Congress is to public sentiment and how alive public sentiment is to public interest. I do not favor the Plumb plan in all its provisions; I introduced the bill by request. I have always advocated the amortization of the fixed capital of the railroads by the Government or in any other way by which it can be done without increasing the burdens on the shipper, and if we do not do something of that sort, if we are going to keep on piling capitalization upon capitalization-if the situation is so serious, why do not intelligent men like yourself devise a plan which will reduce the burden and prevent this future increase by amortization and try to make the securities attractive to those who have funds to invest in them?

Mr. RICH. We have tried, Judge Sims, through our associated industries plan, to meet that to a certain extent, so far as it can be met, without Government ownership.

Mr. SIMS. In other words, Government ownership is worse, in your estimation, than any possible condition that either now exists or can arise under possible investment of private capital?

The CHAIRMAN. Mr. Rich, we thank you for your presentation. Is there any other gentleman to be heard? Is Mr. Barrett here?

Mr. BARRETT. I understood that your committee would meet tomorrow morning, and I have arranged to present to the committee such data as I desire to present. If it is convenient to the committee I should rather be heard to-morrow morning. I have not the data and memoranda which I expected to have.

The CHAIRMAN. I can not give you the same assurance as to being heard to-morrow morning as this morning.

Mr. BARRETT. I think I will take the chance.

LETTER AND AMENDMENTS SUBMITTED BY MR. J. D. A. MORROW, VICE PRESIDENT NATIONAL COAL ASSOCIATION.

Hon. JOHN J. ESCH,

NATIONAL COAL ASSOCIATION. Washington, D. C., September 4, 1919.

House of Representatives, Washington, D. C.

MY DEAR MR. ESCH: After submitting the proposed amendments of the EschPomerene bill, H. R. 4378, to the House Interstate Commerce Committee of August 28, the National Coal Association, in conference with its general counsel, gave further consideration to the third amendment as submitted and came to the conclusion that it was defective in the following respect. It was subject to the construction that the carrier must equalize the distribution of cars every day during a car-shortage period which would in certain cases bè a practical impossibility. We, therefore, prepared a new draft of this amend ment, substituting for the phrase "on any day or days on which there is a car shortage on its line" the phrase "during a car-shortage period," and adding the following provision: "The proportionate distribution required by this paragraph shall be accomplished during successive 14-day periods which may be designated from time to time by the carrier."

Our amendments as originally proposed have been in substance embodied in the Cummins bill, S. 2906, and we have to-day conferred with Senator Cummins respecting the changes in the third amendment just referred to. Those changes are satisfactory to the Senator and we understand from him will be inserted in the Senate bill. The amendments will then be satisfactory to us and we desire to urge your committee to incorporate them in the House bill.

For convenient reference the amendments now embodied in the Senate bill No. 2906 (introduced by Senator Cummins) will be found at the following places:

First amendment, page 49, lines 21 to 23.

Second amendment, omitted.

Third amendment, from page 52, line 12, to page 54, line 5.

Fourth amendment, page 61, lines 4 and 7.

Fifth amendment, omitted.

If these amendments meet with your approval, it does not appear to us to be necessary to have a hearing before your committee, unless the other members desire some information. In that case, we will be glad to appear at any time you may designate, and in any event I have asked Mr. John Callahan, our traffic manager, to call on you in regard to the matter.

Very truly, yours,

J. D. A. MORROW, Vice President National Coal Association.

The revised amendments are as follows: AMENDMENTS TO THE PROPOSED BILL TO FURTHER AMEND AN ACT ENTITLED “AN ACT TO REGULATE COMMERCE," APPROVED FEBRUARY 4. 1887, AS AMENDED, AND FOR OTHER PURPOSES, INTRODUCED IN THE SENATE BY SENATOR POMERENE JUNE 2, 1919, BEING S. 1256, AND INTRODUCED IN THE HOUSE OF REPRESENTATIVES BY CONGRESSMAN ESCH, BEING H. R. 4378.

[Italicized words indicate proposed amendments.]

FIRST SUGGESTED AMENDMENT.

That the first paragraph of section 2 of the above bill be amended so that it

shall read as follows:

"SEC. 2. That the amendment to section 1 of the commerce act approved Mar 29, 1917, is hereby amended to read as follows: The term "car service" in

this act shall include the use, control, supply, movement, distribution, exchange, interchange, and return of locomotives, cars, and other vehicles used in the transportation of property, by or to any carrier subject to this act, or by or to any shipper making or offering any shipment or shipments subject to this act, and shall also include the supply, movement, and operation of trains by any carrier subject to this act, either on its own lines or in its relations with any other carrier or carriers.'"

SECOND SUGGESTED AMENDMENT.

That the second paragraph of section 2 of the above bill be amended so that it shall read as follows:

"It shall be the duty of every carrier by railroad subject to this act to furnish to shippers and others entitled thereto safe and adequate car service and to establish, observe, and enforce just and reasonable rules, regulations, and practices with respect to car service; and every unjust and unreasonable rule, regulation, and practice with respect to car service is prohibited and declared to be unlawful."

THIRD SUGGESTED AMENDMENT.

That section 2 of the above bill shall be further amended by adding the following paragraph after line 3, page 7:

"It shall further be the duty of every carrier by railroad subject to this act, serving coal mines located upon its line or lines, to make just, reasonable, and nondiscriminatory distribution among such mines of all cars available for the transportation of coal during any period (hereinafter called a car-shortage period) when the carrier's supply of cars for such service does not equal the requirements of such mines. To that end, every such carrier shall make and establish rules and regulations providing for the rating of such mines and, during car-shortage periods, the distribution of cars among them in proportion to such ratings. The rules and regulations so established shall provide, among other things, that each and every car furnished or used for the transportation of coal during a car-shortage period shall be counted against the proportionate distributive share of the mine receiving or using it, and that no cars shall be furnished to or used by any mine for the transportation of coal during a carshortage period in excess of the proportionate distributive share of such mine, regardless, in either case, of who the consignor or consignors or the consignee or consignees or the owner or owners of the coal loaded or to be loaded in such cars may be, or of the purpose for which such coal may be used or intended, or of the ownership of such car or cars. It shall be unlawful for any such carrier, by any rule, regulation, or practice, either directly or indirectly, to fail or refuse to count against the proportionate distributive share of any mine, any car or cars furnished to or used by such mine for the transportation of coal during a car-shortage period, or to furnish to any mine, for the transportation of coal during a car-shortage period, any car or cars in excess of the proportionate distributive share of such mine, regardless, in either case, of who the consignor or consignors or the consignee or consignees or the owner or owners of the coal loaded or to be loaded in such cars may be, or of the purpose for which such coal may be used or intended, or of the ownership of the car or cars. The proportionate distribution required by this paragraph shall be accomplished during successive fourteen-day periods, which may be designated from time to time by the carrier. In case of failure or refusal on the part of any carrier, receiver, or trustee to count any car or cars against the proportionate distributive share of any mine, or the furnishing for loading by any carrier, receiver, or trustee of any cars in excess of the proportionate distributive share of any mine, as herein provided, such carrier, receiver, or trustee shall be liable to a penalty of not less than $100 nor more than $500 for each offense (and each failure or refusal to count any one car or each furnishing of any one car shall be deemed a separate offense), which penalty shall accrue to the United States and may be recovered in a civil action brought by the United States. The provisions of this paragraph shall not be construed to limit or restrict the power or authority of the commission to require the establishment, observance, enforcement, and filing of reasonable rules, regulations, and practices with respect to car service not in conflict herewith."

FOURTH SUGGESTED AMENDMENT.

That section 7 of said bill be amended to read as follows:

"SEC. 7. That the first paragraph of section 6 of the commerce act be amended to read as follows:

"That every common carrier subject to this act shall file with the com mission and print and keep open to public inspection schedules showing all the rates, fares, and charges for transportation or transmission between different points on its own route, and between points on its route and points on the route of any other carrier subject to this act when a through route and joint rate have been established, and in the case of every such carrier which reaches by its line or lines of railroad, any coal mine or coal mines, schedules also showing all rules and regulations having to do with the rating of mines and the distribution of cars used for the transportation of coal. If no joint rate over the through route has been established, the several carriers in such through route shall file, print, and keep open to the public inspection, as aforesaid, the separately established rates, fares, and charges applied to the through transportation or transmission. The schedules printed as aforesaid by any such common carrier shall plainly state the places between which property and passengers will be carried or intelligence transmitted, and shall contain the classification of freight or messages in force, and shall also state separately all terminal charges, storage charges, icing charges, and all other charges which the commission may require, all privileges or facilities granted or allowed, and any rules or regulations which in any wise change, affect, or determine any part or the aggregate of such aforesaid rates, fares, and charges. or the value of the services rendered to those for whom the service is performed. Such schedule shall be plainly printed in large type, and copies for the use of the public shall be kept pasted in two public and conspicuous places in every depot, station, or office of such carrier where passenger or freight. respectively, are received for transportation, or facilities are afforded to the public for transmitting intelligence, in such form that they shall be accessible to the public and can be conveniently inspected. The provisions of this sec tion shall apply to all traffic, transportation, transmission, and facilities defined in this act.'"

FIFTH SUGGESTED AMENDMENT.

That there be inserted between section 8 and section 9 of the said bill a section as follows:

"SEC. 8a. That there be inserted between ninth and tenth paragraphs of seetion 6 of the commerce act the following paragraph:

"It shall be the duty of every carrier by railroad to permit inspection by any shipper of its records, showing the available car supply on such carrier and its distribution between different portions of its line or lines of railroad, and the distribution of cars between shippers using similar kinds of cars and between shippers shipping similar kinds of traffic or otherwise pertaining to the distribution of cars. The Interstate Commerce Commission shall prescribe the time and manner in which such inspection may be made by any shipper or shippers, and, in case of refusal of any carrier or carriers to permit such inspection, may, by general or special order, with or without formal complaint, enter an order requiring any such carrier to grant forthwith to any shipper or shippers the opportunity to inspect the records herein described."

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,
HOUSE OF REPRESENTATIVES,

Friday, September 12, 1919.

The CHAIRMAN. The committee will now be glad to hear Mr. Loos. STATEMENT OF MR. KARL D. LOOS, OF COUNSEL FOR THE NATIONAL COAL ASSOCIATION, CHICAGO, ILL.

The CHAIRMAN. Mr. Loos, please give your name, address, and whom you represent.

Mr. Loos. My residence is Chicago, Ill. I am a member of the firm which acts as counsel for the National Coal Association. The Na