vote killed the bill; and on this vote the vast majority of those who insisted on reapportionment voted to recommit the bill. thereby killing the measure and destroying the possibility of a reapportionment bill at that session.

Mr. JACOBSTEIN. I believe that to be a fair statement, but it indicates again that there is trouble ahead in the 1930 reapportionment.

Mr. LOZIER. One more statement, with your permission: California and Michigan would have secured a large increase in their representation if this bill had been enacted; but on the motion to recommit seven members of the Michigan delegation in the House voted to recommit, three were paired in favor of recommitting, two voted against the motion, and there is no record as to the views of the other Representative from Michigan. Three of the Representatives from California voted to recommit, four voted against the motion, and four did not vote. The two States Michigan and California, that would have fared the best under the bill as reported by the committee, were largely instrumental in defeating this bill, thereby destroying all chance for reapportionment on that occasion. Our colleagues from Michigan and California are loud in their demands for a new reapportionment, but I am wondering if they have told the people of their States that they would have secured an increased representation seven years ago, if their Representatives in Congress at that time, had not lent their influence to defeat the 1921 reapportionment bill.

Mr. DOWELL. Mr. Speaker, will the gentleman permit a question?

Mr. JACOBSTEIN. If it is on the bill; yes.

Mr. DOWELL. It is. On the bill as it now stands Congress is delegating the power

Mr. JACOBSTEIN. If the gentleman will give me five minutes more, I think I can answer all these questions.

The emergency is going to be more critical in 1930. I will tell you why. The population has probably increased from 105,000,000 to approximately 125,000,000.

If you undertake to satisfy the wishes of every State in the Union you will have to have a House with a membership of 535. It is inconceivable that that will be done. Five hundred and thirty-five means a size too large to be wieldy, it seems to me, and there is a decided opinion here that in view of the fact that so many Members voted for 435 they are not going to vote for 535. If you do not get legislation in 1930 you will have a rotten borough system developed in this country by which 30,000,000 people will be unfairly represented in the United

States.

it the power, when ordered by the President, to increase or decrease a tax. Our apportionment does not begin to go as far as that. What we propose here is not so drastic. We are merely assigning a function, a ministerial function, to a department of the Government which we at all times control. We say to the Census Bureau, "We direct you to apportion 435 members on the basis of the 1930 census, using the method of major fractions, but only to become effective or operative if we do not act." At any time if we choose to act and do enact legislation, then that particular apportionment which has been set into operation ceases to be the law.

It seems to me the bill is very simple. It is easy to understand. We surrender no power and it protects the Nation against the emergency of a deadlock that might arise in the year 1930 and which might be fraught with serious consequences to the country.

Mr. DOWELL. Will the gentleman yield?
Mr. JACOBSTEIN. Yes.

Mr. DOWELL. As I understand this bill it authorizes the apportionment for 1930.

Mr. JACOBSTEIN. On the basis of the 1930 population. Mr. DOWELL. That involves the same principle, does it not, as though we made a permanent apportionment by the Census Department?

Mr. JACOBSTEIN. After that 1930 population census is taken, Congress is at liberty to act and should act. But if it fails to do its duty in 1930-31 then this bill provides a definite method and basis for reapportionment. That is all there is to it.

Mr. DOWELL. This is permanent law for action in the future?

Mr. JACOBSTEIN. It is permanent only in the sense that if Congress fails to act that method and formula continues to operate and should.

Mr. DOWELL. If Congress fails to agree on the number they will permit, then the Census Bureau will make an apportionment in 1930; in 10 years, in 1940, they make it again. Mr. JACOBSTEIN. That is right.

Mr. DOWELL. In 10 years they make it again.
Mr. JACOBSTEIN. That is right.

Mr. DOWELL. And unless Congress agrees to the number

Mr. JACOBSTEIN (interposing). Just let me make one

Supplementary remark there. They will have to do it every 10 years, but when the Census Bureau does do it it is bound by the particular formula prescribed by Congress itself.

Mr. DOWELL. To be sure, but you have delegated it to the Census Department.

Mr. JACOBSTEIN. That is right. We have not, however, delegated any legislative power, but have merely assigned a

Congress always reserves that legislative power. In fact, Congress can always pass supplementary legislation on reapportionment and has done so on many occasions. I will now answer the question in the minds of many of you and raised in the minority report. Congress surrenders none of its powers. It can act at any time on reapportionment, and there is ample precedent for this statement. What it does do is this: It says to the Bureau of the Census, "Go ahead and take the census of the population of 1930, and after you have done that, after you have enumerated the population according to the States of the Union, assign representation to every State on the basis known as major fractions," a method used in 1910, a method used in 1920, and a method which is very simple to understand. I think I could make it plain to you in five minutes if I had the time. So Congress does not divest itself of its authority. It is constitutional. The last word from the Supreme Court of the United States bears me out in this. Only a month agoApril 9, 1928-the Supreme Court of the United States sustained the flexible provisions of the tariff act (J. W. Hampton, jr., & Co. v. The United States), wherein Congress gave another Government agent the power to fix rates on imports and gave

ment, just as Congress did when it set up the Interstate Commerce Commission or the Tariff Commission, only with this difference, however, in the reapportionment bill this other outside agency is powerful and does not function at all if Congress does its duty by taking affirmative action. The Census Bureau merely submits tables to Congress showing reapportionment for a House membership of 435 on the 1930 census figures. These figures become the reapportionment when transmitted by the Clerk of the House to the several States. Neither the Census Bureau nor the Secretary of Commerce exercises any discretionary power. It is all done by specific direction of the Congress.

THE FEDERAL COURTS

The SPEAKER pro tempore. The time of the gentleman from New York has expired. Under special order of the House the gentleman from New York [Mr. LAGUARDIA] is recognized for 15 minutes.

Mr. LAGUARDIA. Mr. Speaker, I have had occasion to speak concerning the Federal judiciary several times. I have been criticized for my outspoken statements concerning Federal judges. That my statements were "too strong" was stated by some of my colleagues. Others claim that I am entirely wrong. The power of the judiciary has been steadily creeping and growing, until to-day it has established itself a supergovernment answerable and responsible to no one. The framers of our Constitution but a few years after its adoption saw this danger. The best minds of the time protested against the encroachment of the court on legislative and administrative functions of the other branches of Government. It was seen even in the early days of our Republic that this mighty power could and would be used or misused by a selfish, greedy minority for the exploitation of the masses. No one living to-day, whether Republican, Democrat, Progressive, or independent, will doubt the wisdom, ability, foresight, and patriotism of

Thomas Jefferson. There are few outstanding figures in American history who everyone claims as they do Thomas Jefferson. With prophetic vision and almost uncanny accuracy he looked into the future and saw exactly what the Federal courts would become and the power that they would eventually arrogate unto themselves. Just let me pause for a moment to read a short quotation from Thomas Jefferson:

We already see the power, installed for life, responsible to no authority (for impeachment is not even a scarecrow), advancing with a noiseless and steady pace to the great object of consolidation. The foundations are already deeply laid by their decisions for the annihilation of constitutional State rights and the removal of every check, every counterpoise to the ingulphing power of which themselves are to make a sovereign part. Let the future appointments of judges be for four or six years and removable by the President and Senate. This will bring their conduct at regular periods under revision and probation, and may keep them in equipoise between the general and special governments. We have erred in this point by copying England, where certainly it is a good thing to have the judges independent of the King. But we have omitted to copy their caution also, which makes a judge removable on the address of both legislative houses. That there should be public functionaries independent of the Nation, whatever may be their demerit, is a solecism in a republic of the first order of absurdity and inconsistency. (Letter to Mr. William T. Barry. Cyclopedia.)

Mr. RAMSEYER. Will the gentleman yield?
Mr. LAGUARDIA. Yes.

Mr. RAMSEYER.

The Jeffersonian

From what is the gentleman quoting? Mr. LAGUARDIA. I am quoting from a letter written by Thomas Jefferson to William T. Barry. It will be found in the Jeffersonian Cyclopedia, page 448.

Just another short quotation from Jefferson:

At the establishment of our Constitution the judiciary bodies were supposed to be the most helpless and harmless members of the Government. Experience, however, soon showed in what way they were to become the most dangerous; that the insufficiency of the means provided for their removal gave them a freehold and irresponsibility in office; that their decisions, seeming to concern individual suitors only, pass silent and unheeded by the public at large; that these decisions, nevertheless, become law by precedent, sapping, by little and little, the foundations of the Constitution and working its change by construction before anyone has perceived that that invisible and helpless worm has been busily employed in consuming its substance. In truth, man is not made to be trusted for life if secured against all liability to account. (Letter to A. Coray. The Jeffersonian Cyclopedia.)

Now, Mr. Speaker, only a few days ago a decision was handed down in the city of New York by a so-called statutory court, this court consisting of either a justice of the supreme court and two circuit court judges or a judge of the circuit court and two district court judges.

Mr. WAINWRIGHT. How are they convened?
Mr. LAGUARDIA. They are convened on motion.

I desire to call the attention of my colleagues at this time that what happened to New York a few days ago may happen in your cities at any time. In fact, this regulation of public service utilities and local municipal matters by Federal courts is not new. Greedy public-service corporations have learned that they can run to the Federal courts and evade State laws and regulatory measures of State commissions. They will sign a contract or accept a franchise from a State commission, agree to all the terms, solemnly agree to submit to the regulatory powers of a State commission, with a dishonest mental reservation that as soon as they obtain the franchise or the contract they will go to the Federal courts and obtain judicial relief from compliance and exploit the people to the extent of their greed and the nerve of the Federal judge. The State of Indiana is at this very moment protesting against the usurpation of the Federal courts. I have here a resolution passed by the Legislature of the State of Indiana begging Congress to protect the State against the action of the Federal courts, and at this point, Mr. Speaker, I ask unanimous consent to read part of the resolution of the Indiana Legislature and to extend the complete resolution.

The SPEAKER pro tempore (Mr. FENN). The gentleman from New York asks unanimous consent to extend his remarks in the manner indicated. Is there objection? The Chair hears

269, acts of seventy-fifth regular session of the General Assembly of the State of Indiana:

A joint resolution requesting Congress to prepare, support, and secure the enactment of legislation limiting and defining the jurisdiction of the United States courts in public utility and rate cases to the consideration after, not before, the courts of various States have considered the issue involved

Whereas Congress in 1816 created Indiana a sovereign and independent State, with full right to control its local affairs, and the corporations it created, and these would include especially utility corporations, furnishing water, light, gas, phone service, and other necessities; and

Whereas the growth and development of the State of Indiana and its public utilities reached such proportions in 1913 that it became necessary that careful and proper consideration of the rights of the public and the adequate protection of the public welfare, made it necessary for the General Assembly of the State of Indiana to create a public-service commission; and

Whereas certain utilities of this State, to wit: The Indianapolis Water Co., the Indiana Bell Telephone Co., the Citizens Gas Co. of Indianapolis, and The Central States Gas Co. of Vincennes, and the Greensburg Water Co. of Greensburg, petitioned the Public Service Commission of the State of Indiana for increased rates for service to the public; and

Whereas such petitions were heard and valuations thereof determined and rates fixed by the Indiana Public Service Commission, which were in the judgment of the commission fair, reasonable, and just; and Whereas said utilities, to wit, the Indianapolis Water Co., the Indiana Bell Telephone Co., the Citizens Gas Co., the Central States Gas Co., of Vincennes, and the Greensburg Water Co. did, immediately in each case, invoke the jurisdiction of the Federal court of the State of Indiana instead of taking their cases to our State courts, alleging that the valuation determined and rates fixed by the public service commission were confiscatory; and

Whereas the laws of the State of Indiana governing the public service commission provide for and authorize any utility or person interested in any rate order to appeal to the circuit or superior court of any county in this State from any order of the commission fixing such rate, or rates, or valuation; and

Whereas such utilities did, in each instance, invoke the jurisdiction of the Federal court without first having pursued the remedy provided by the laws of the State of Indiana giving the right to appeal to the State courts; and

Whereas in each instance the Federal court has fixed a higher valuation and a higher rate than that fixed by the public service commission; and

Whereas the right of the State of Indiana to control its local affairs with reference to such utilities was defeated and prevented; and

Whereas the Public Service Commission of Indiana fixed the valuation of the Indianapolis Water Co. at $16,455.000; the Indiana Bell Telephone Co. at $32,000,000; the Citizens Gas Co. at $12,000,000; the Central States Gas Co. of Vincennes at $482,845, and the Greensburg Water Co. at $225,000; and

Whereas thereafter at hearings in the Federal Court of the District of Indiana the valuations of these public utilities were fixed at the following figures, to wit: The Indianapolis Water Co. at $19,000,000, resulting in increase of rates; Indiana Bell Telephone Co. at $36,000,000, resulting in increase of rates; Citizens Gas Co. at $16,000,000, increasing the rate for gas from 90 cents to $1.20; Central States Gas Co., of Vincennes, at $739,572; and the Greensburg Water Co. at $340,000, resulting in increase of rates: Therefore be it

Resolved by the Seventy-fifth General Assembly of the State of Indiana, That the United States Senators and Members of Congress representing the State of Indiana be, and they are hereby, respectfully petitioned to prepare, support, and their associates enact legislation limiting the jurisdiction of the courts of the United States in all cases that may be filed therein by public utilities seeking relief from orders issued by public service commissions, to such utilities as have first exhausted all legal remedies given by the courts of the respective States; Be it further

Resolved, That copies of this resolution be transmitted by the governor and the secretary of state to the Senators and Members of Congress representing the State of Indiana, and the Senators and Congressmen of the other States of the United States.

F. HAROLD VAN ORMAN,
President of the Senate.
HARRY G. LESLIE,

Speaker of the House of Representatives.

Filed March 11, 1927-12.02 p. m.

The city of New York has invested over $400,000,000 in subways. These subways are operated by rapid-transit corporations under a contract with the city of New York. Among other things, the contract provides that the operating companies must furnish service under certain general conditions, and specifically provides that a fare of 5 cents shall be charged. The gentlemen must bear in mind that at the time the contract was signed there was a movement all over the United States for cheap transportation. Many of the cities in Ohio were enjoying 3-cent car fares. Six rides and seven rides for a quarter were in effect in many cities of the United States. So the operating companies, to protect themselves, insisted that the 5-cent provision should be written into the contract. It was written into the contract. It has been there for 15 years. If when the operating companies were making huge profits and declaring big dividends the city of New York would have sought to lower the rate, the operating companies would have resisted and would have insisted upon the rights of contract. Yet, now we find these same companies, after years of maneuvering, after years of the dirtiest kind of politics, resorting to the Federal court to aid in the execution of their dirty work.

Mr. WAINWRIGHT. Will the gentleman yield for a question?

Mr. LAGUARDIA. Yes.

Mr. WAINWRIGHT. May I ask the gentleman to enlighten us as to what claim of authority this statutory court asserts in order to get control of this matter? I think there is a great deal of confusion in the public mind as to how this purely local question got into a Federal court.

Mr. LAGUARDIA. The decision handed down by this socalled statutory court starts off with an apology and a misstatement of facts. It makes a clumsy attempt to prevent the scorn of public opinion. It states in the opinion that the action in the Federal court was commenced by the subway company prior to the action commenced in the State court by the transit commission. Not one of the millions of strap hangers of New York City will be deceived by this misstatement of fact, even if it is contained in a judicial decision.

The action was commenced in the Federal court by obtaining an ex parte order from a Federal judge residing in Westchester hours after court had adjourned. This ex parte order was suddenly presented to the judge and signed by him at his home. The order is lengthy, involved, and technical. Yet the ex parte order signed by the judge at his home was prepared and printed. How did the transit company know how the judge would decide and what he would put in the order to have a printed and prepared order for his honor to sign? The fact is, and everyone in New York knows it, with the apparent exception of the three judges who sat on the case, that this order was obtained after both the Federal court and the transit companies had learned that the State commissioners had moved in the State court to protect the rights of the city of New York and the millions of citizens compelled to use the subways.

The opinion of the court smacks of the shrewd mathematics of the curb rather than the deliberate judgment of the bench. The prophetic wisdom of Jefferson was never more emphasized than in the present instance. I submit that it was the intention of the framers of the Constitution that the Federal courts should dispense justice and should not be made the adding machine for greedy corporations.

The decision in the Interborough Rapid Transit Co. case increasing the rate of fare without any justification of facts compares with the political decision in the Dred Scott case. It will settle nothing. The millions of people of New York City will simply refuse to pay the increased fare.

I happen to have first-hand knowledge concerning the contracts under which the Interborough Rapid Transit Co. is operating. First of all, the people of this country must know that the city of New York owns the subways. Second, that the Interborough operates these subways under a contract with the city of New York. When I was president of the board of aldermen in 1920, the Interborough and the other rapid-transit companies appeared before us seeking to modify the contract. It was admitted and conceded then that the rates of fare could not be increased unless both parties to the contract consented. This happened to me. I do not get this out of a book. I was president of the board when they applied for a modification of the contract.

It was the law then. On the showing the board of estimate and apportionment of which I was a member refused to modify the contract and the fare was not increased. The law has not changed since 1920. The judges have changed.

If the contract was constitutional and valid during the years that the Interborough and other rapid-transit companies

paid out over 180 per cent in dividends, it is constitutional to-day.

This case is not novel in any way. The same point came squarely before the Supreme Court in the case of the Georgia Railway & Power Co. against the town of Decatur, reported in two hundred and sixty-second United States Reports on page 432. There the facts were almost identically the same as in this It was a case where the city of Decatur, Ga., had made a contract with the railroad for a 5-cent fare, and the railroad sought to increase the fare to 7 cents, exactly the same as in New York, and after a lengthy opinion the court said, Judge Sutherland writing the opinion-I can give the law in two lines

case.

The contract being valid, we are not concerned with the question whether the stipulated rates are confiscatory.

And there are a number of such decisions. They cite in their opinion the cases of Southern Iowa Electric Co. v. Chariton (255 U. S. 539), Paducah v. Paducah Railway Co. (261 U. S. 267).

The question is not novel. The very conduct of the statutory court in face of the existing law raises a suspicion that the Federal court will never be able to remove.

The outrageous decision handed down by the so-called statutory court lays down a new principle of law which is unAmerican, inequitable, unconstitutional, and indecent. This decision says that a contract is valid when a corporation is making enormous profits and invalid at any time that its profits decrease according to the corporation's own view as to what is a reasonable return.

I challenge anyone to point out one decision in the Federal courts where a corporation was compelled to reduce its rates agreed upon in a contract with a municipality, county, or State because the corporation was making too much profit.

Did you ever hear of such a case? If this law is good, then I challenge anyone to show a case in point.

Now, gentlemen, get this:

The court either refused to examine the figures of the Interborough or else ignored them. In either event the court was not justified in granting an increase in fare.

Now get these figures:

The Interborough as a matter of fact is not losing money. So even if the court had jurisdiction as a matter of law and the rate was confiscatory; but the court did not, because the rate was fixed in a contract. But even so, on the facts themselves it can not be shown that the rate of 5 cents is confiscatory, because the companies are not losing money, but making a profit.

During the first six months ended June 30, 1927, this same company that went before the Federal court and complained that it was losing money, paid $265,541.46 Federal income taxnet income on this figure would be $1,966,973.78. For the calendar year 1926 this same company paid $89.507.27-net income on this figure would be $292,646.44.

The courts stress the lease with the Manhattan Railway Co. This Manhattan Railway Co., whose rates are now to be increased because it claims that it must operate under a confiscatory rate of fare, made so much money that from January 1, 1918, to June 30, 1927, it paid $4,800.000 Federal income tax. All through the decision you will find many references to the lease existing between the Interborough and the Manhattan Railway Co. This lease is for 999 years. What they did, gentlemen, was this: The same crowd that owned and controlled the Interborough got control of the Manhattan and leased the company to themselves.

The only difference between the men who negotiated the lease between the Manhattan Railway and the Interborough and Gerald Chapman is that Gerald Chapman was caught, convicted, and hanged. [Laughter.]

If the court was honestly sincere in seeking to bring about relief and if it claims the power to destroy the contract between the city of New York and the Interborough, it could destroy the dishonest and fraudulent contract between the Manhattan Railroad and the Interborough.

As a matter of fact, the Interborough can operate on 5 cents under the contract with the city of New York and make money. Everybody in New York knows it except the three judges who sat on the case.

Section 380 of the United States Code, or section 266 of the Judicial Code, was never intended to be used in a case where a contract was involved. The purpose of this provision of the law was to create a tribunal to immediately pass upon a State law which might bring irreparable injury if enforced, though unconstitutional. But, gentlemen, this law that is now brought before the Federal court is nothing new. It was first enacted