the inquiry. All of you realize, of course, that if we have too bulky a record it will never be read and never be a fruitful source of information upon these various subjects, if the hearings are too much diffused.

I will ask whether there are any representatives here of State commissions who would like to be heard upon any of these problems?

Mr. JONES. F. A. Jones, chairman of the Arizona Corporation Commission. My request for time would depend somewhat upon the developments of the hearings.

The CHAIRMAN. Is there any special subject upon which you wish to be heard, Mr. Jones?

Mr. JONES. Possibly the apparent conflict between State and interstate regulation. That is as important as anything to the State commissions.

The VICE CHAIRMAN. Mr. Chairman, I would suggest to Mr. Jones that it would not be safe for him to give direction to his testimony according to what he thinks may be developed here, because we have already had hearings and will have many more hearings, probably; SO you had better address yourself to the subject which in your mind seems best. This may constitute but a very small part of the hearings out here.

Mr. JONES. I should be glad of the opportunity to have a few moments at any time.

The CHAIRMAN. When would you like to be heard, Mr. Jones?

Mr. JONES. My preference would be to-day or to-morrow. I do. not know how long the committee will sit.

The CHAIRMAN. We will probably not proceed far in the hearings to-day. Would you like to be heard to-morrow?

Mr. JONES. To-morrow will be satisfactory.

The CHAIRMAN. We will have a meeting to-morrow, commencing at 10 o'clock.

Mr. THELEN. Commissioner Loveland, Commissioner Gordon, and I are here representing the California commission. Commissioner Edgerton will be here later. We may have some little affirmative testimony, such testimony as will probably take not more than 10 or 15 minutes.

I am also here in the absence of Senator Bristow, who is chairman of the committee on State and Federal legislation of the National Association of Railway and Utilities Commissioners. In his absence I have been delegated to represent the national association at these hearings.

The CHAIRMAN. Mr. Thelen, you will recall that you were to present yourself again for examination by the members of the committee.

Mr. THELEN. I shall throw myself on the mercy of the committee at any time when the committee desires to proceed with me.

The CHAIRMAN. Will you be ready to proceed at any time? Mr. THELEN. At any time that suits the convenience of the committee.

The CHAIRMAN. Is there anyone else who desires to be heard? Mr. MCCARTHY. W. S. McCarthy, representing the traffic bureau of Utah. I desire to enter an appearance and may desire to present some testimony or figures if it seems necessary as the hearings. develop.

The CHAIRMAN. Upon what subject would you like to be heard? Mr. MCCARTHY. The subjects of Federal control as against that of State commissions, and also the matter of rates as probably affecting the long and short haul clause, as it interests the intermountain country.

The CHAIRMAN. Is there any other State commission which would like to be heard? Are there any chambers of commerce or boards of trade represented here?

Mr. MANN. Mr. Seth Mann. If the committee please, I would like to enter my appearance for the San Francisco Chamber of Commerce, and probably some time next week, if the committee is sitting, I shall be ready to appear before you.

The CHAIRMAN. Some time next week?

Mr. MANN. Yes, sir.

Mr. GREGSON. Fred P. Gregson, representing the traffic department of the Associated Jobbers of Los Angeles, a commercial organization would like to be heard on both the question of Federal control and the intermountain situation.

The CHAIRMAN. The question of the long and short haul clause? Mr. GREGSON. The long and short haul clause, and as to time, I should like to follow in line with the commercial bodies and State. commissions and after Mr. Mann, of San Francisco.

Mr. BRADLEY. G. J. Bradley, representing the commercial interests of Sacramento, Cal. I wish to enter an appearance and ask the courtesy of the committee, if I feel so disposed, to give very short testimony. I may not have anything to say, but I should like the privilege, if occasion arises, both as regards the question of State against Federal control and also as regards the long and short haul clause.

Mr. HILL. F. M. Hill, representing the Fresno Traffic Association, I may or may not have something in the way of testimony to present, but I should like to reserve a little time, if your honor will permit, on the question of State and Federal commissions and the long and short haul clause.

The CHAIRMAN. Will you inform the clerk when you will be ready to proceed?

Mr. HILL. Yes, sir; I would like to follow the other commercial interests in their line.

Mr. MANN. I should also like to enter the appearance of S. J. Wetrick, of Seattle, who will enter the city to-night, according to a telegram I received.

Mr. BISHOP. L. R. Bishop, representing the Oakland Chamber of Commerce, would like to enter an appearance and possibly would like to put in some testimony on the questions which have been men

tioned.

The CHAIRMAN. Are there any other chambers of commerce represented?

Mr. SOMMERS. J. C. Sommers, representing the Stockton Chamber of Commerce. I do not know whether I would like to put in any testimony, but if I do, it will be along the same lines as the other commercial organizations.

The CHAIRMAN. Please keep the clerk informed as to your whereabouts in case we should have an opportunity to hear you.

Mr. SOMMERS. Yes, sir.

The CHAIRMAN. Are there any other commercial bodies that would like to be heard? Are there any individual who would like to be heard on these questions, whether representatives or not of commercial bodies?

Mr. TROY. E. P. E. Troy, representing the Public Ownership Association of San Francisco, would like to deal with the various stages of the railroad question and public ownership that would tend to enlighten your committee on the question of Government and public ownership.

The CHAIRMAN. When would you like to be heard?

Mr. TROY. I should like to follow toward the latter end of your session, after you have heard the official and commercial bodies.

The CHAIRMAN. Will you be in attendance, so as to be available for call at any time?

Mr. TROY. Yes, sir; I shall, but I should like to have a little notice. in order to prepare in a proper way what I want to say.

The CHAIRMAN. Senator Cummins suggests that we should proceed to-morrow morning consecutively and as speedily as possible with these hearings.

The VICE CHAIRMAN. You mean in the order in which the gentlemen have entered their appearances?

The CHAIRMAN. In the order in which they are willing to appear, so that I imagine Mr. Thelen will be ready to-morrow morning. Is there anybody else who will be ready to-morrow morning?

The VICE CHAIRMAN. I suggest that after the cross-examination of Mr. Thelen is concluded that we take up the witnesses in the order in which they have entered their appearances this morning.

Senator CUMMINS. That is entirely satisfactory to me. I think Mr. Healy can probably arrange for the order in which they should

come on.

The VICE CHAIRMAN. If they desire to make any substitutions or change places, that can be done by mutual consent.

The CHAIRMAN. The clerk will arrange with the gentlemen who have made their appearances as to the order in which they shall appear.

Is there anybody else who wishes to be heard? The committee has received an indication that some of the representatives of the commercial bodies and State commissions of the intermountain region would like to be heard regarding the long and short haul clause. I received a communication from Senator King, of Utah, informing me that there was a gentleman to be here. I think a gentleman from Utah presented his appearance, and I should like to know from him whether Senator King will appear before us.

Mr. MCCARTHY. I understand not. I understand Senator King is leaving for Honolulu to-day and will not appear. As to the suggestion concerning the testimony being given in the order in which appearances were entered, I should like to say, so far as Utah is concerned, I am not prepared at the present time to offer the testimony that should be given in support of our position. I should like to defer that to a date later in the hearings.

The CHAIRMAN. Mr. Bartine, the chief of the Nevada commission, stated that he wished to appear. He does not seem to be present to-day.

Mr. Thelen, if you are ready now the committee will hear you and proceed until about 12 o'clock and then adjourn until to-morrow at 10 o'clock.

STATEMENT OF MR. MAX THELEN-Resumed.

Senator CUMMINS. Mr. Thelen, you appeared before the committee some months ago, but in order to make the connection I suggest that you state here your relation to this matter.

Mr. THELEN. At the time I appeared before this committee in Washington, I was the president of the National Association of Railway Commissioners. My term has expired since, and at the present time I am a member of the committee on State and Federal legislation of the National Association of Railway and Utility Commissioners. I am also president of the Railroad Commission of California.

Senator CUMMINS. As I remember your statement, or argument, you were opposed to the plan of Federal incorporation which had been rather elaborately laid before the committee by Mr. Thom? Mr. THELEN. Yes; that is true.

Senator CUMMINS. You were opposed to it for various reasons, but among other reasons, because, first, it would result in substituting Federal control for State control in many things which you thought would be unwise?

Mr. THELEN. I was opposed to it in part because of the provisions of that plan as presented by the railroads, and I was opposed to it also because of my feeling that this plan of Federal incorporation, as presented by the railroads, was merely to be used as an agency for taking away from the States all their powers in connection with the railroads to any extent engaged in interstate commerce. In other words, my opposition is based in part to the specific plan as presented and in part to the general purpose and aim which I believe the railroads have in connection with the general subject of Federal incorporation of railroads.

Senator CUMMINS. Without attempting to recite the various points of your argument, as I remember it, you were opposed to a compulsory Federal incorporation law, because you believe that, through the instrumentality of Federal incorporation, the States could be and would be deprived, first, of its authority to regulate or control intrastate rates, and also its power to tax the railway property?

Mr. THELEN. As I understand the plan presented by the railroads, it does not contemplate, at this time, that the States shall be deprived of their power to tax railway property nor that they shall be deprived of police powers which the railroads denominate as nonvital. But if the plan is followed, then it has within it the possibility of taking from the States even those two remaining powers which they do not contemplate taking away right away, namely, first, taxes, and, second, police powers which they denominate as nonvital.

Senator CUMMINS. I will not undertake to classify the powers of regulation into those which are vital and those which are nonvital, but confine myself, for the moment, to the powers which I think everybody will concede are vital, namely, the power to adjust or regulate State traffic and the power of taxation. You remember the argument was that, at this time, at any rate, it was not suggested that

there should be an exemption of railroad property from State taxation.

Mr. THELEN. That is correct.

Senator CUMMINS. But, as I remember it, your argument was that if all the carriers of the United States doing an interstate business were required to incorporate under a Federal law it would lead easily and quickly to the exemption of railroad property from State taxation.

Mr. THELEN. In other words, if the Federal Government has the power, under the Constitution as it now stands, to exempt railway property in the States from taxation, then this would be a very convenient agency or vehicle for exercising that power and taking from the States their power to tax all railroad property.

Senator CUMMINS. As I remember it, your argument insisted that, under the plain inference of the decisions of the Supreme Court already rendered, Congress could exempt the property of railroads performing interstate service from State taxation through Federal incorporation.

Mr. THELEN. Yes; and I drew the committee's attention to two decisions of the Supreme Court of the United States, one known as the Thomson case and the other known as the Peniston case, in which there was clear intimation or suggestion from the Supreme Court to the effect that if the Federal charters in those particular cases had specified that the States should not have the power to tax the railroad property, the States would have lost their power of taxation. In those two cases, however, the Supreme Court found that the charters did not contain those specific provisions, and for that reason, in those two cases, the State was authorized to continue its power to tax, but the inference in those two decisions is very clear that through the instrumentality of Federal incorporation of railroads the States could be deprived of their power to tax railroad property, even though located within their limits.

Senator CUMMINS. In your review of the matter you began with the well-known case of Reagan v. The Mercantile Trust Co., in which are found suggestions or conclusions which lead you to the opinion that if all carriers of the country were required to incorporate under a Federal law it would be constitutional for Congress to interpose in that either special or general incorporation law a provision that would prevent and could prevent State taxation.

Mr. THELEN. The Reagan case was a rate case, but I assume that the inference which is contained in that case as to rates would have equal application to taxation.

Senator CUMMINS. It was a rate case, and was followed by the case of Smyth against Ames, or Ames against Smyth, which was also a rate case, and following these decisions, down to the present time, you reach the conclusion that if Congress were to pass a Federal incorporation law and were to put into it a provision that would entirely exempt railroad property from taxation the States would lose their power of taxation.

Mr. THELEN. If I may put my view this way, it is, if a Federal incorporation act were passed, and if that act contained a provision by which the States were to be deprived of their power to tax railroad property, and then if the Supreme Court will establish as law the dictum in the two cases before mentioned, and in the Minnesota rate