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Senator WHEELER. And a candidate for the Presidency.
Mr. EMERY. Mr. Hoover said:

If investigation of the same general character had been concentrated, one of the recent widespread questionnaires would never have been sent out be. cause so far as the information desired could ever be effectively collected it was already in the hands of the Government. In this case if replies were complete enough to be of any value a low estimate of the cost to the citizen of making the returns would be $50,000,000 in bookkeeping alone. One firm stated that a reply would cost them $20,000, a country doctor complained that it would cost him $100. This case illustrated another point: The questionnaire carried every earmark of peremptory demand, yet as a matter of fact no citizen was required by law to furnish the information asked for. Such activi. ties are a definite form of oppression. They lend themselves to doubtful constitutional practices of search and inquiry.

I thank you, gentlemen of the committee.
(The witness left the table.)
The CHAIRMAN. So far as I know that concludes the hearings.
Senator PINE. No, Mr. Chairman; we were to hear Judge Ainey.

The CHAIRMAN. Oh, yes; here is our friend, Judge Ainey, of Pennsylvania.

Mr. AINEY. Mr. Chairman, I do not wish to detain the committee overlong. I realize that

The CHAIRMAN (interposing). Could you complete your remarks in 15 minutes ?

Mr. AINEY. I hardly think I could.

Senator WALSH of Montana. I had thought we would conclude to-day.

The CHAIRMAN. Senator Walsh, how much time do you want in which to conclude?

Senator Walsh of Montana. I had hoped we would get through to-day, but it will perhaps take me half an hour.

The CHAIRMAN. Then it is understood that there is no other witness desiring to be heard, except Judge Ainey, and whatever time you want to-morrow, Senator Walsh, is at your disposal.

Senator Walsh of Montana. Shall I proceed now? I shall be very glad to do so. The CHAIRMAN. Do you mean now? Senator WALSH of Montana. Yes.

Mr. AINEY. How long does the committee desire to remain in session to-day? I do not think that I could conclude to-day, and if it is satisfactory to the gentlemen of the committee I would prefer not to go on to-day.

The CHAIRMAN. Senator Lenroot, did you have anything else to present?

Mr. LENROOT. In reference to the chairman's remark I will say that we have no further witnesses or facts to present, but especially in view of what Senator Walsh said in regard to presenting certain excerpts from the Federal Trade Commission's report, and in view of some of the inquiries by the committee, we may desire to ask Judge Ransom, who was very active in the preparation of the brief, to address the committee and clear up those matters, but it will not be in any way a further presentation of facts.

The "CHAIRMAN. We would like to conclude these hearings tomorrow.

Senator WHEELER. I think we ought to conclude them to-morrow. I think these people have had ample time.

The CHAIRMAN. Well, we have always aimed to give everybody an opportunity to be heard. It is the custom of this committee to give proper opportunity for anybody who has anything to present, and I understand that everybody is satisfied in regard to the length of time afforded. Therefore the committee will now rise until 10 o'clock to-morrow morning.

Senator SMITH. Let us understand first whether or not we propose definitely to close this matter to-morrow.

The CHAIRMAN. My understanding is that we will close the hearings to-morrow.

Senator Smith. The reason I am asking that question is that there is a matter of very great importance coming up before another committee, and the chairman has indicated that he would postpone calling the committee together until we are through with this work.

The CHAIRMAN. My understanding is that we will close these hearings to-morrow at 12 o'clock, noon.

Mr. LENROOT. Is that with reference to the presentation of facts or also as to argument?

The CHAIRMAN. I have no authority to speak for the committee, and never assume to do so, but I imagine the committee would not care to hear summing-up arguments on the question.

Senator COUZENS. I think the chairman is right, and that those who want to be heard between 10 and 12 o'clock to-morrow ought to divide time.

The CHAIRMAN. I meant that we would not care for arguments on the question to be made in the nature of an argument to a jury, a summing up.

Senator WALSH of Montana. I have no desire to do that, but have something I wish to present.

The CHAIRMAN. Senator Lenroot, had you desired to present such an argument to the committee?

Mr. LENROOT. Not quite by way of summing up, but we do desire to present Judge Ransom, and I meant to request that if he did not have an opportunity to appear to-morrow that we would not like to be shut off.

The CHAIRMAN. Well, we are latitudinarians in matters of this kind. I should like an executive meeting here for about five minutes if we can get it.

Thereupon, at 11.50 a. m., the room was cleared and after a brief executive session the committee adjourned to meet again to-morrow, Thursday, January 26, 1928, at 10 o'clock a. m.

INVESTIGATION OF PUBLIC UTILITY CORPORATIONS

THURSDAY, JANUARY 26, 1928

UNITED STATES SENATE,
COMMITTEE ON INTERSTATE COMMERCE,

Washington, D. C. The committee met, pursuant to adjournment on yesterday, at 10 o'clock a. m., in room 212, Senate Office Building, Senator James E. Watson (chairman), presiding.

Present: Senators Watson (chairman), Couzens, Fess, Howell, Sackett, Smith, Dill, Wheeler, Mayfield, Hawes, Black, and Wagner.

Present also: Senator Walsh of Montana.

The CHAIRMAN. Gentlemen, I have arbitrarily assumed to make a program this morning, allowing Judge Ainey 20 minutes, Judge Ransom 40 minutes, and Senator Walsh as much of the remaining time as he may care to use. Judge Ainey, I suggest that you proceed. STATEMENT OF WILLIAM D. B. AINEY, CHAIRMAN PUBLIC

SERVICE COMMISSION OF PENNSYLVANIA

Mr. AINEY. Mr. Chairman, when I was before this committee sometime ago I adverted to the fact that the Pennsylvania Public Service Commission had started a fairly extensive inquiry into the electric development in the State of Pennsylvania with respect to service and rates and expenditures; that we had not quite completed a check, although I had utilized in rough outline a statement before the Middle Atlantic States Utility Association, of which I had the honor of being a president. Those figures have been checked, and that is one of the reasons I have asked an opportunity to come before you at this time.

With a view to celerity and to bring myself within the 20 minutes allowance which you have made, I will take the liberty of reading this statement.

When I appeared before your committee, I stated that the Public Service Commission of the Commonwealth of Pennsylvania has made a comprehensive study of the electric power development in our State from the effective date of our organic law in 1914 down to the present time. The figures and data had not then been fully checked.

My appearance here to-day is in the hope that the information, which I am now enabled to lay before your committee, will be helpful in aiding this committee to determine whether an investigation is necessary, and, if necessary, the extent to which it should go. I adverted to the fact that the Public Service Commission was an arm of the legislative branch of our Government, and I questioned, in the light of the decisions the expediency and legality of an inquiry

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made by either branch of the Federal Government into the activities of the legislative branches of the several States of the Union.

On this point I might illustrate that were the State agencies proposing to inquire into the activities of the Interstate Commerce Commission, which bears the same relation to your distinguished body that the State commissions do to the State legislatures which created them, the unwisdom of so proceeding, and the illegality of the attempt, would be apparent.

Merely for the purpose of aiding your committee and the membership of the United States Senate, I submit a bibliography of the decisions to the effect that regulatory bodies are arms of the State legislature and perform duties which a legislature would have the right to perform itself either directly or through committees.

The table of cases is as follows:

CASES BEARING UPON THE LEGISLATIVE CHARACTER OF REGULATION OF PUBLIC

UTILITIES BY COMMISSIONS OF THE STATE

In the following cases, among many others, the courts have declared the uniform rule that the regulation of public utilities by State commissions is the exercise of a legislative function of the States, delegated to the commission for the administration of State laws as arms of the legislatures :

UNITED STATES SUPREME COURT CASES

Railroad commission cases, 116 U. S. 307.
Reagen v. Farmers' Loan & Trust Co., 154 U. S. 362, 393-4.

“There can be no doubt of the general power of a State to regulate the fares and freights which may be charged and received by railroad or other carriers, and that this regulation can be carried on by means of a commission. Such a commission is merely an administrative board created by the State for carrying into effect the will of the State as expressed by its legislation.”

Prentis v. Atlantic Coast Line Co., 211 U. S. 210.
Honolulu Rapid Transit Co. v. Hawaii, 211 U. S. 282, 291.

" It is a power legislative in its character and may be exercised directly by the legislature itself. But the legislature may delegate to an administrative body the execution in detail of the legislative power of regulation. Reagan v. Farmers Loan & Trust Co., 154 U. S. 362, 393, 394; Interstate Commerce Commission v. Cincinnati, New Orleans & Texas Pacific Railway Co., 167 U. S. 479, 494.”

Stanislaus v. San Joaquin & Kings River Canal & Irrigation Co., 192 U. S. 201, 207.

Knoxville v. Knoxville Water Co., 212 U. S. 1, 8.
Louisville & Nashville Railroad Co. v, Garrett, 231 U. S. 298, 307.

Lake Erie & Western Railroad Co. v. State Public Utilities Commission of Illinois, 249 U. S. 422, 424.

Ohio Valley Water Co. v. Ben Avon Borough, 253 U. S. 287, 289.
Wichita Railroad & Light Co. 1. Public Utilities Commission, 260 U. S. 48, 38-9.
Keller v. Potomac Electric Power Co., 261 U. S. 428, 440.

Bluefield Waterworks Co. v. Public Service Commission of West Virginia, 262 U. S. 679, 683.,

Chicago Junction Case, 264 U. S. 258, 263.

FEDERAL COURT CASES

Backus-Brooks Co. v. Northern Pacific Railway Co., 21 Fed. (20) .

STATE COURT CASES

Yeatman v. Towers, 95 Atl. 158, P. U. R. 1915 E 811, 815.

* The power to regulate and control public utilities is one which may be exercised by the legislature directly or its exercise may be committed by the legislature to a board or commission, in which case the board or commission is administratively performing a legislative function."

State ex rel United Railway Co. of St. Louis v. Public Service Commission, 192 S. W. 958; P. U. R. 1917 D 752, 760.

A. T. & S. Fe Railway Co. v. Corporation Commission of Oklahoma, 170 Pac. 1156; P. U. R. 1918 C 598, 607.

Washington v. Public Utilities Commission, 124 N. E. 46; P. U. R. 1919 F 365, 368.

Public Service Commission v. Pavilion Natural Gas Co., 182 N. Y. S. 55 ; P. U. R. 1920 D 844, 849.

New Bremen v. Public Utilities Commission, 195 Pac. 498, P. U. R. 1921 E 742, 747.

Oklahoma City v. Corporation Commission, 195 Pac. 498; P. U. R. 1921 C 801, 810.

Taylor v. Public Utilities Commission, 186 N. W. 485; P. U. R. 1922 D 198, 200.

New York Central R. R. Co. v. Public Service Commission, 134 N. E. 282; P. U. R. 1922 D 525, 532.

Alabama Grt. Southern R. R. Co. v. Public Service Commission, 97 So. 226; P. U. R. 1924 A 477, 481.

Public Service Commission v. St. Louis-San Francisco Ry. Co., 256 S. W. 226; P. U. R. 1924 B 690, 692.

Tulsa v. Corporation Commission, 221 Pac. 1000 ; P. U. R. 1924 B 767.
Smith v. Corporation Commission of Oklahoma, 225 Pac. 708.
Ohio Utilities Co. v. Public Utilities Commission, 140 N. E. 497.
Re Boston & Maine Railroad Co., 129 Atl. 880.
Norfolk & Western Ry Co. v. Commonwealth, 129 S. E. 324.

State ex rel. Kansas City Terminal Ry. Co. v. Public Service Commission, 272 S. W. 957.

State v. Jacksonville Terminal Co., 106 So. 576.
Union Indemnity Co. v. Railroad Commission, 205 N. W. 492.
Chippewa Power Co. v. Wisconsin Railroad Commission, 205 N. W. 900.
C., M. & St. P. Ry. Co. v. Board of Railroad Commissioners, 247 Pac. 162.
Illinois Central R. R. Co. v. Mississippi Railroad Commission, 109 So. 868.

Village of Saratoga Springs v. Saratoga Gas, Electric Light & Power Co., 191 N. Y. 123,

In State ex rel. Public Utilities Commission v. New York Central Railroad Co., 154 N. E. 790; P. U. R. 1927 D 336, 338, the Supreme Court of Ohio said that the commission was an arm of the legislature.

Swarthmore v. Public Service Commission, 121 Atl. 488; P. U. R. 1923 E 367 (Penna.).

Pennsylvania v. Benn, 131 Atl. 253 (Penna.).
Commonwealth ex rel. v. Stewart, 286 Pa. 511; 134 Atl. 392.

I present a statement of the development of the electrical industry in Pennsylvania under our regulatory laws from the effective date of creation of the Public Service Commission, January 1, 1914, to December 31, 1927, with three points in view:

1. The development of the electrical industry in Pennsylvania in order to meet the industrial, economic, and agricultural demands of our Commonwealth.

2. The effect of these extensions on the consumer in matters of service and rates.

3. The amount of money expended by the electric industry in Pennsylvania in order to this accomplishment.

The following are the outstanding features in the electric light and power situation in Pennsylvania during the year 1914–1927, inclusive, in which the electric utilities have been regulated by the State.

1. Electric consumers in Pennsylvania are to-day saving on the average of approximately $25,000,000 a year over the rates that were in effect in 1914. In other words, if the rates that were in effect in 1914 were applicable to-day consumers would be paying approximately $35,000,000 annually more than they are presently paying.

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