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so that we must have two commissions, it may work a very great injustice to the city of New York, because if we are to continue the regulation of rates and the character of service as a State policy it should be done for the city of New York without cost to the city, just the same as it is done now for Buffalo and Syracuse and Rochester and Utica and Albany and the other cities, without any direct cost to their taxpayers. And it will only be right and proper that that part of the management and control of the subways, which might be called the fiscal business, should be turned over to the city authorities.

Mr. Schurman - Do I understand that with the completion of this construction work the city of New York would pay but 15 per cent. of what it now costs, under the activities of the commission?

Mr. A. E. Smith -About 15 per cent. of its $1,800,000 is to go to the rate making, to investigations, so to speak, yes; and, of course, it will save all these engineering costs.

Mr. Schurman Because the work will have been completed? Mr. A. E. Smith-Because the work will have been completed. Mr. Wickersham - I understood the gentleman's reference to be to the expense of the commission in the first district and about 85 per cent. of the expenses of that commission are devoted to this work of construction, to which the gentleman has referred.

Mr. A. E. Smith That is right. Now, on page 2, I believe that to be a mistake. It is going to, on its face, look ridiculous to the people of this State,- to say the least about it, it would look ridiculous. In effect it is this: the Legislature is by that prevented from exercising a function that it has the power to delegate to another agency, and makes legislative action dependent upon its own creature before it can operate. Now, I think that is rather ridiculous.

Mr. Wagner-In this proposal it is no longer the delegated power, as I understand it, but hereafter it shall be an independent function of the public service commission, or a concurrent funetion with the Legislature, to fix rates, because this bill provides that each commission shall have the jurisdiction, powers and duties it now has.

Mr. A. E. Smith-Yes, but the Legislature may at some future time decide to bring under its operations things not now there.

Mr. Wagner-I did not mean to ask that question for the purpose of opposing you, for I am with you, but I wanted to bring out what in your opinion this proposal is doing, in giving absolute power to the public service commissions of fixing rates as a concurrent function with the Legislature. Without interference. by the Legislature, or independent of the Legislature.

Mr. Schurman - I wanted to ask Mr. Smith what he referred to on page 2, as I was unable to follow his argument.

Mr. A. E. Smith - Beginning on line 12 of page 1, it says in fixing the jurisdiction and power and duties of the commission: "Except that the Legislature shall not enact any law prescribing a rate or charge or a standard of service, equipment or operation for any public utility until after it has received from one of the commission a report thereon, made after investigation," and so forth.

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Mr. A. E. Smith - Now, I see the point of the question by Senator Wagner. I want to go a step further and say that all public service corporations in this State are not now under the public service commissions. The private water companies, for instance, are not supervised by the public service commissions, Now, should the Legislature at any future time decide to give that jurisdiction to the commission, under this proposal they would delegate to the commission the power of regulating the rates of water, something they would not have the power to exercise themselves, after that amendment, without the concurrence of the body which is their own creature and their own agent. Now, another point about it. I believe in the policy of regulation by commission. I think that it is entirely wrong for the Legislature to be passing rate-making bills, because that cannot be done with any degree of knowledge about the subject, unless after long and exhaustive legislative investigations, and that is extremely costly and should be done away with in view of the fact that there is maintained a permanent staff, a permanent organization, to carry this work on continuously through the year and be ready to submit that information to any State body that requires it at any time.

No very great progress in rate fixing has been made by these commissions. Let us have that pretty clear in our minds. The only great benefit that the people can point to as having received from the upstate commission is the reduction of telephone rates. and let us see how that was brought about. That cost the State, independent of its appropriations for salaries and maintenance,it cost the State a hundred odd thousand dollars, and why? When an attempt was made to pass a bill fixing these rates, a resolution was offered in this House and concurred in by the Senate calling upon the Public Service Commission for the necessary information upon which the Legislature may base its action, and the reply obtained from the Public Service Commission was that its working force was entirely inadequate to supply that information. That did not argue very well for the system; did not argue very

well for commission control, when that commission was itself obliged to admit that they were unable to produce the one great thing for which they were organized, the information, after proper investigation, for action as to rates. There may come a time when the Legislature may for reasons that we are unable to see to-day desire to enact as a matter of law a fixed rate. Now, what do I mean by that? I mean this. In the case of the telephone company no resistance came from the company, but had the company resisted in a review of the Commission's action, they would be allowed to test the reasonableness of that order. The power should be left in the Legislature that where there is no question about that, this branch of the government should have the right to say that is the law of the State, without going to any other body or any other commission but this Legislature, but if the Legislature is entirely satisfied, that it should be enacted, so that the appeal could only be had on the ground that it confiscated their property. Now, of course, by the actual wording of that provision, you can very readily understand well, I was going to say it was designed; I will take that back; I will say it was not designed but it will in effect stop all rate regulation by the Legislature. If you want to do that, you might just as well say so and do it, so that the people of the State will understand definitely that it is not the duty of an Assemblyman or a Senator to try to get them cheap railroad fares, or cheaper gas or cheaper electricity. Have it in black and white so that a constituency, wherever it may be in the State, when it meets in caucus or convention, or whatever you care to call it, to nominate Brown or Jones or Smith for Senator or member of the Assembly, they won't pass a resolution that night that the first thing he must do it to get cheaper gas for the taxpayers of some ward or the taxpayers of his city. Put it right in there, and it will be plain and everybody will understand it; but this will have the same effect, because if you read it, it cannot pass any law fixing any rate or prescribing any standard of service until it has received from one of the commissions a report thereon, made after an investigation and hearing at which interested parties may introduce evidence. Now how long do you suppose that will take? Without appropriations, according to the Public Service Commission itself, in the telephone case, twenty

two years.

Mr. Blauvelt-"Or until after the expiration of such time following the request for such report as may be prescribed by law." Mr. A. E. Smith - How can you prescribe that by law? Mr. Blauvelt-The Legislature.

Mr. A. E. Smith-Why, you don't believe they will ever pass a bill here that they must do it in thirty days or sixty days? Mr. Blauvelt A reasonable time.

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Mr. A. E. Smith-A reasonable time? Well, you can't get it over ninety days and have the Legislature in session to deal with the report. That would be all right if we adopted Mr. Hinman's suggestion of monthly sessions of the Legislature, but if the Legislature of 1915 is going to adjourn on the third of May and not coming back any more, what good is all this? What time can you possibly fix that you can say will be a reasonable time, in view of the fact that one of the commissioners himself is on record in reply to a resolution here as saying that with the appropriations they have, it would take 22 years to estimate the actual value of all the property used in the telephone business? I say it does not mean anything. It is an unnecessary hobble on the Legislature. What will be the result of it? The legislator that is ambitious to get cheaper gas for the community that he lives in, cheaper electric light for the community that he lives in, is not only going to have the bill as he now has it, but he will have the resolution calling upon the commission to supply the Legislature immediately with all this information in a time to be prescribed by law.

Mr. F. L. Young-Will you state whether you think it would be undesirable to take the matter entirely away from the Legislature and give it to the Public Service Commission to fix rates?

Mr. A. E. Smith - Well, I suppose you could constitutionally do that, but I do believe that the people of the State would not be entirely satisfied with it because the Public Service Commissions are scarcely representative. I know I can name you a great section of New York that one has not come from yet.

Mr. F. L. Young My question, Mr. Smith, was to bring out the fact, as I know from my personal experience, that it is practically impossible for a member of the Legislature to figure out what a reasonable rate is.

Mr. A. E. Smith-That is true, but it may be well to leave the power there to enact it if it became apparent that a given rate was reasonable and the public service corporations upon which it was imposed attempted to resist the power of the State through the Commission. There ought to be enough of reserve power and enough of reserve energy held back by a branch of the government to be able to jack up the fellow that resists its agent, just the same as an officer would have the right to call the reserve if a man refuses to submit to arrest when he is clearly in the wrong. This should be the reserve force and the reserve power of the State, vested as it is in that branch of the government to-day, to make it the law of the land so that the man who stands in violation of it, stands not alone in violation of an order from a commission but he raises his arm against the State itself. Whether or not that will be used, I am not prepared to say, but it should be left there.

Mr. Bernstein Do I understand you would favor a proposition which would leave the power in the Legislature and at the same time give the Legislature the right to delegate that power to the Public Service Commission? Will that cure the defect that you point out?

Mr. A. E. Smith—That is the present condition. That is the situation as it now exists.

Mr. Bernstein-In other words, would you have the Constitution fix the relation in that matter?

Mr. A. E. Smith No, I would not. I think that is wrong. I do not believe in tying us up or wedding us to any particular plan for any length of time because you never can tell when you will want to change it.

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Mr. Reeves Mr. Chairman and gentlemen: When the Public Service Commissions Law was enacted in 1907, it was undoubtedly an experiment. Since then we have seen the Interstate Commerce Commission growing in power and strength; we have seen the law of reason announced for its regulation; and we have seen these Commissions in New York that were so carefully provided for, the law for which had so much study and has received so much care we have seen them grow into what I maintain has come to be an acknowledged position which we ought to continue. It is true, of course, as Delegate Smith has said, that when the subways are completed in New York city the Commission in the first district will not have so much work to do. It is altogether possible that the suggestion of Delegate Wickersham, simply providing for one or more commissions to be arranged by the Legislature, may be a better arrangement. I want to suggest, in passing, however, that that provision, if we take it over, should say "one or two and certainly not give the Legislature the power to go on and speculate and make experiments in this matter and possibly make three or more commissions in the State of New York. Our experience has been that thus far two commissions have worked well and have earned the right to be commended. Now, having done that, they have earned the right to be recognized and fixed permanently in some form in the Constitution. Delegate Griffin has well put it that the right of the Legislature to delegate to the commission judicial powers, the right to delegate any legislative powers may be questioned; and, further than that, we certainly do want this one commission that may be left or this double-headed commission that may be left we certainly do want it free from party influ ence, free from political influence. We want it largely judicial in its makeup and safeguarded by our Constitution. We have already made in this Convention a commission of nine gentlemen to take care of the conservation interests of the State. Our Board of

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