making to Congress recommendations ripened by full study and a wealth of experience for the correction of legislative mistakes and omissions regarding our domestic, and more particularly our foreign commerce, by which governmental practice and commercial efficiency may at last be brought into a degree of harmony to which both have heretofore been unhappily strangers.

THE PUBLIC SERVICE COMMISSIONS

A Lecture Delivered before the Association of the Bar of the City of New York by George S. Coleman, March 29, 1916

THE Committee on Lectures have suggested that I confine myself to a statement of the origin of the Public Service Commissions Law of New York, its general provisions, the organization of the Commissions and the method of work under the Law, with perhaps a reference to some decisions of the courts that have clarified the legislative intent.

The germ of this law may be found in the first inaugural address of Governor Hughes, January 1, 1907. His early statements are like the overture of an opera, in that the law as passed and now in effect carries out in detail the suggestions of the inaugural and earliest messages. The following paragraph from the inaugural is significant :

It must freely be recognized that many of the evils of which we complain have their source in the law itself, in privileges carelessly granted, in opportunities for private aggrandizement at the expense of the people recklessly created, in failure to safeguard our public interests by providing means for just regulation of those enterprises which depend upon the use of public franchises. Wherever the law gives unjust advantage, wherever it fails by suitable prohibition or regulation to protect the interests of the people, wherever the power derived from the State is turned against the State, there is not only room, but urgent necessity for the assertion of the authority of the State to enforce the common right.

In his first message to the Legislature, on January 2, the Governor referred to various matters of importance but gave the greatest prominence to the subject of Public Service Corporations. The following extracts will perhaps best indicate what he had in mind:

Proper means for the regulation of the operation of railroad corporations should be supplied. For want of it, pernicious favoritism has been practiced. Secret rebates have been allowed, and there have been unjust discriminations in rates and in furnishing facilities for transportation. Those who have sought to monopolize trade have thus been enabled to crush competition and to grow in wealth and power by crowding out their rivals who have been deprived of access to markets upon equal terms. These abuses are not to be tolerated. Congress has legislated upon the subject with reference to interstate commerce, where naturally the evil has been most prominent. But domestic commerce must be regulated by the State, and the State should exercise its power to secure impartial treatment to shippers and the maintenance of reasonable rates. There is also need of regulation and strict supervision to insure adequate service and due regard for the convenience and safety of the public. The most practicable way of attaining these ends is for the Legislature to confer proper power upon a subordinate administrative body.

The present scheme of regulation is inadequate. There is a lack of precision in the definition of the powers of the board and an absence of suitable means to compel compliance with its decisions. No penalties are provided for disobedience to orders of the board made within its proper authority. Nor is the board authorized to institute and conduct legal proceedings for the purpose of enforcing its requirements.

I, therefore, recommend that the present Board of Railroad Commissioners and the Commission of Gas and Electricity be abolished and that a new commission be constituted, with powers of regulation and supervision, within constitutional limits, of the corporations now subject to the existing commissions. The commission should have all the powers possessed by the present commissions and such additional powers as may be needed to insure proper management and operation. Its powers should be clearly defined and should embrace the power to act upon its own initiative as well as upon complaint; to pass upon the issue of stocks and bonds; to examine properties, books, and accounts; to require detailed reports in prescribed form; to prescribe reasonable rates; to require adequate and impartial service; to provide for the safety of employees and for the protection of the public; and generally to direct whatever may be necessary or proper to safeguard the public interests and to secure the fulfillment of the public obligations of the corporations under its supervision. Provision should be made for suitable inspection so that the commission may be advised as to all matters within its purview and be in a position

to take action on behalf of the people without the formal institution of proceedings by complainants. A prescribed quorum should be entitled to decide all questions, and any one commissioner should be empowered to make examinations and investigations, and the proceedings and decisions of one, when approved by the board, should stand as its proceedings and decisions.

The corporation guilty of disobedience to its orders, and all officers and other persons responsible for such disobedience should be visited with appropriate penalties. The commission should also be entitled to institute legal proceedings for the enforcement of its orders and all such proceedings should be expedited by suitable preference in all the courts of the State. The Legislature should thus provide, within its constitutional power, adequate means for the entirely just and impartial regulation of these important public enterprises.

After making special reference to conditions in Greater New York and clearly stating his reasons for thinking that there should be one commission for that city and a separate commission for the rest of the State, he closed the subject with this recommendation:

I recommend that the Board of Rapid Transit Commissioners be abolished and that a new board be created, to have all the powers now exercised by the Rapid Transit Board, and also to have powers with reference to operations within the territory of Greater New York, — or if deemed advisable, within a wider district embracing the adjoining counties into which certain lines of the surface railroads extend, - similar to the powers which I have suggested should be conferred upon the new commission for the rest of the State. There would thus be included the regulation of gas and electric corporations. Provision should be made for the retention by the board of estimate and apportionment of the city, of all the powers, including powers of approval, which it now enjoys. The commission proposed for the State generally should have jurisdiction over all traffic between points within the city of New York and points elsewhere in the State. It is believed that in this manner the whole question of transportation, and of gas and electric service, in the territory of Greater New York can be dealt with in an intelligent and efficient manner, and that to the fullest extent possible the just requirements of that great community may be satisfied.

The first emergency message of Governor Hughes to the Legislature in 1907 related to Senate Bill No. 1738, entitled "An Act to establish the public service commissions and prescribing their powers and duties, and to provide for the regulation and control of certain public service corporations and making an appropriation therefor."

Every Governor from Cleveland down had at one time or another suggested some form of control and regulation of public service corporations by state officials, but it remained for Governor Hughes to have the idea put in systematic form and made effective. As you read the Public Service Commissions Law of 1907 you find that every important suggestion of the first message is crystallized in the statute.

Instead of being purely advisory the work of the Commission is directory, and the law has sharp teeth. If the facts warrant, the parties who fail to obey either the law or the orders of the Commission may be suitably punished in civil or criminal proceedings. You will find provisions to overcome the defects of the railroad law of years ago, when favoritism was disclosed, when different rates were allotted to the same classes of shippers, when rebates were permitted to some and denied to others — abuses that gave rise to the Granger Cases and led ultimately, as you know, to the Interstate Commerce Law. But even the Interstate Commerce Law did not contain the provisions of the Public Service Commissions Law which give power to the Commissions, through the properly constituted authorities, to enforce their lawful orders.

General Provisions

It is hardly necessary, nor does it seem desirable, on this occasion to discuss in detail the provisions of the Public Service Commissions Law. Those who have occasion to refer to it will find the provisions embodied in a single statute, with amendments, and they will discover that although relating to