may be authorized by any law relating to proceedings in bankruptcy; nor shall the writ of injunction be granted by any court or judge of the United States to restrain the enforcement, operation, or execution of any statute of a State, or any order, rule, or regulation having the force of a statute of a State, or order, rule, or regulation made by a commission or body authorized by State laws to regulate and control common carriers or other public service corporations: Provided, however, That this section shall not be construed to restrain or in any way to affect the jurisdiction conferred upon the Supreme Court of the United States by section two hundred and thirty-seven of “the Judicial Code."

Senator BROWN. As I understand it, this bill is intended to stop the abuse that now exists in the way of injunctions which stay the proceedings of State courts, preventing the carrying out of orders made by public-service corporations, etc., having jurisdiction over common I would like to have your judgment on whether or not it would be a good idea also to include a provision which would deny the right of the Federal court to delay the collection of State taxes by injunction.

Commissioner EUSTIS. I should think it certainly would. There certainly seems to me no good reason why the United States should interfere with the powers of the State to collect taxes by tying them up by injunction any more than there is that they should tie the hands of the State through its commissions in doing their work; but we do not have anything to do with the collection of taxes.

STATEMENT OF HON. IRA B. MILLS, CHAIRMAN RAILROAD COMMISSION OF THE STATE OF MINNESOTA.

Senator BROWN. How long have you had the position of chairman of the Minnesota Railroad Commission?

Commissioner MILLS. I have been chairman for the last 14 years, and was appointed on the commission by Gov. Nelson in 1893. Í have been there ever since.

Senator BROWN. Speaking generally, what is the scope of the jurisdiction of the commission?

Commissioner MILLS. We have a general jurisdiction of the rates of the carriers and of operations, putting in sidetracks and prescribing elevator sites.

Senator OVERMAN. And the building of stations?

Commissioner MILLS. And the building of stations and any question of operation. Our statute is very broad and the Supreme Court has given it a liberal construction.

Senator BROWN. You have power over rates within the State? Commissioner MILLS. Yes; State rates, as broad as can be given. Senator BROWN. The committee would be glad to have your statement with reference to the bill.

Commissioner MILLS. It is conceded, of course, that Congress has jurisdiction to enact such legislation. There is very wide dissatisfaction in Minnesota with the interference of the Federal courts in the enforcement of State statutes as well as in other States, which I found from talking with the members of the National Association of Railroad Commissioners, which is composed of the officers of the different States having control of common carriers, and mostly every State has such a body.

Senator OVERMAN. Are they about the same thing and simply different names?

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Commissioner EUSTIS. I think in some cases the public-service corporations take in other branches besides railroads. We has gas and electric lighting under us.

Commissioner MILLS. It is so with the Minnesota commission. We have the weighing and inspection of grain and weights and measures. As I was saying, there is a general dissatisfaction with the Federal interference with the enforcement of orders of the commissions and of legislative enactment in making rates or otherwise controlling common carriers.

This matter was brought up in the last convention of the national association, and, without a dissenting voice, a resolution was passed requesting Congress to pass such legislation and authorizing the legislative committee of that association, of which I am chairman, to urge its enactment by Congress.

September 6, 1906, the Minnesota commission made an order fixing the merchandise rates in the State. The rates before this order was made were not the same on the different roads, on some being more or less discriminatory, and in the southern part of the State were much lower than in the northern part. The order of the commission equalized all this, and the railroad companies put the order in effect and it so remained until July 1, 1911.

Traffic men have told the commission-I mean by this those who actually have the traffic in charge and who receive the complaintsthat there had been scarcely a complaint in regard to these rates during the time they were in force.

The legislature passed a law (chapter 232 of the laws of 1907) which made a commodity schedule. At the same session they passed a 2-cent passenger fare rate. The companies put in the 2-cent passenger rate, and, as I understand it, the tariffs were printed to put in the commodity rate, when stockholders of the several companies brought action in the Federal court against the companies, the attorney general and railroad and warehouse commission asking for and obtaining a temporary injunction against all those rates, but the court, on hearing before trial, Judge Lochren presiding, refused to enjoin the merchandise rate or the 2-cent fare rate. Subsequently, on April 8, 1911, Judge Sanborn, after final hearing, granted an injunction enjoining all the rates.

Senator OVERMAN. After the decision in the Minnesota case, we passed a bill through Congress requiring that no injunctions should issue unless as many as three judges should join in the order. Has that had any good effect?

Commissioner MILLS. Not so very much, because it does not apply to State laws.

Senator OVERMAN. Oh, yes, it does.

Commissioner MILLS. The bill I read did not.

Senator OVERMAN. On account of the unconstitutionality of the State statutes you can not issue an injunction unless as many as three judges consent.

Commissioner MILLS. Is that your law?

Senator BROWN. That is section 266, unless three judges consent. Commissioner MILLS. I was mistaken; I had in mind that it does not apply to orders of commissions, but there is dissatisfaction with the Federal court's interference at all. It is very unsatisfactory to the people of the different States, when their legislatures pass an act

or their commissions make orders, that their enforcement should be stopped by an injunction issued by the Federal court. When the court once takes jurisdiction it holds it has the right to try every question that arises under the statute and within the pleading; so many questions arising under your statute may be decided which in themselves would not give the complainants the right to go into the Federal court. The State courts always endeavor to give the statute such a construction as will save its constitutionality, while an entirely different meaning may be placed on it in the Federal court, and, when so interpreted, the statute is held to be unconstitutional, while if it had been first construed by the State court it would have been held good even by the Federal court.

It seems only reasonable that a State should be allowed the right to have a construction placed on its statutes by its own courts and find out what it means. Then, if so construed that it interfered with any constitutional right, this right can be protected by the Supreme Court of the United States, where the decision of the highest State court can be reviewed on writ of error. There is no guaranty in the Federal Constitution that the issues of fact in any of this kind of cases should be first passed upon by a Federal judge. It is the law that if you get jurisdiction in your State court first the Federal courts will not interfere. A legislature passes an act. It may be signed by the governor about 11 o'clock at night. The sheriff starts out to get service on the corporation in an action by the attorney general to enforce the statute, and some attorney for the corporation is waking up the Federal judge to issue an injunction. That is not a dignified way of proceeding and should not prevail in the administration of the laws of this country. The States have furnished courts with jurisdiction in equity to fully protect the rights of the companies and there is no excuse for not using them.

Senator NELSON. Will the committee permit me to ask a question for my information? I am not a member of this subcommittee. Senator BROWN. Certainly.

Senator NELSON. I understood that Judge Hook, in the Oklahoma case, issued an injunction while the question at issue was on appeal to the Supreme Court, while it was being tried. ·

Commissioner MILLS. Yes; there is an appeal provided by the Oklahoma statute from the decision of the commission to the supreme court. The companies went so far as to take that appeal.

Senator NELSON. To the supreme court of the State?

Commissioner MILLS. Yes. They asked the supreme court of the State for a supersedeas. They argued their right to a supersedeas and the supreme court denied it, and then Judge Hook took jurisdic tion.

Senator O'GORMAN. After or before the decision?

Commissioner MILLS. After the decision of the court that denied the supersedeas.

Senator NELSON. A writ of error ought to have gone from there to the Supreme Court of the United States, it seems to me, and that is what these commissioners want, as I understand it. Is that correct?

Commissioner MILLS. Yes, sir. There is a long delay caused by the Federal Court's interference, and it is a very expensive way to have to try your case in equity. The State of Minnesota has a case pending now. They atatcked our merchandise rate, which has been in

force for three or four years, and in fact the companies seemed to be satisfied with it. As I have suggested, the traffic men said that our merchandise rate worked with less complaint than anything they had ever had, because it equalized rates with different parts of our State. Under it small jobbers could do an internal wholesale business in some of our small towns, which proved very satisfactory. Our statute provided that after a rate had been once in force it could not be changed without the consent of the commission. This merchandise rate was enjoined by the final decree of Judge Sanborn, and it was decided that the companies must put in the old rates with all their discriminations. This created a great dissatisfaction and nullified the State statute requiring consent of the commission.

Senator OVERMAN. Is the case still pending?

Commissioner MILLS. Yes; the case is pending in the Supreme

Court.

Senator BROWN. How long has that case been pending?

Senator NELSON. If you will allow me to interrupt-after the preliminary injunction the legislature made a 2-cent passenger rate instead of 3 cent.

Commissioner MILLS. Yes; I will explain that. In December, 1906, the railroad and warehouse commission made an order readjusting merchandise rates and making some reductions. These were accepted and put in force by the companies. On December 14, 1906, the commission made an order readjusting the commodity rates. To enjoin this, the railroad companies affected brought an action in the Federal court. The legislature met in January, 1907, and passed what is known as the 2-cent passenger rate. After examining this question it thought it would not be fair to maintain as low a merchandise rate as had been made by the commissioners' order, so to remedy this, a commodity rate was passed which raised the commissioners' rate 7.37 per cent. Some of the stockholders then commenced another action in the circuit court of the United States in May, 1907, and applied for a preliminary injunction. This was heard before Judge Lochren, on affidavits produced by the company and the commission. Several days were spent in argument, when Judge Lochren ordered that the enforcement of the legislative commodity rate be enjoined during the pendency of the action, but refused to grant an injunction against the 2-cent passenger rate and the merchandise rate already in force.

After hearing and final decree, Judge Sanborn, in April, 1911, granted an injunction against all the rates, including the merchandise, 2-cent passenger, and commodity rates. That action is still pending on appeal in the United States Supreme Court, and will be argued in April.

Senator NELSON. The injunction did not cover that part of it-the preliminary injunction?

Commissioner MILLS. No.

Senator NELSON. And the roads have been operating over two years on that 2-cent a mile basis, and the facts are that they did not lose any money by it?

Commissioner MILLS. No; they have not lost any money.

Senator NELSON. And yet, by this final decree of the circuit court, Judge Sanborn ordered the restoration of the 3-cent rate after they had used the 2-cent rate for two years?

Senator BROWN. In that connection, you say that the reasonableness of the 2-cent rate was not in court?

Commissioner MILLS. Oh, yes; it was an issue in court, but on the showing made on the hearing for a preliminary injunction Judge Lochren refused to enjoin either the 2-cent passenger rate or the merchandise rate.

Senator NELSON. But in the final injunction it was?

Senator BROWN. What were the issues on which final injunction was granted? Did it include the reasonableness of the 2-cent fare? Commissioner MILLS. Yes; the issues included the 2-cent passenger rate, the merchandise and commodity rates.

Senator OVERMAN. Did it decide that the 2-cent rate was unreasonable?

Commissioner MILLS. The court decided that the 2-cent-fare rate was confiscatory, while if the companies had charged 2 cents to all the intrastate passengers, they would have earned $12,000 more than they did under the old 3-cent rate. There was a test of nine months made on the Northern Pacific to show the result of the 2-cent fare, and, from the exhibits filed, this would be the result: While the net result was somewhat less for this period than the revenues of the company for the same period the year before, the State passenger business increased 19.8 per cent. There was a decrease of 1.1 per cent in the passenger revenue, but the average rate charged by the company was 1.93 cents per mile for State business, while the law permitted the collection of 2 cents. The ordinary one-way local passenger was required to pay 3 cents per mile; those who purchased 1,000mileage tickets were carried at 2 cents, clergymen 14 cents, and roundtrip excursion tickets were sold at 2 cents at all times to parties of 10 or more traveling between the same station, and to the public, individually, on certain holidays, fairs, or conventions, and other occasions, whenever it suited the company's purpose to grant these favors. Commutation tickets were sold to suburbanites and lake resorters at an arbitrary rate-sometimes below 1 cent a mile- and before the enactment of the 2-cent fare a large number of people were carried free; so, although the statute reduced the 3-cent rate 333 per cent, it did by no means reduce the passenger revenue by 33 per cent, but only to the extent of 15 per cent, and the business was actually profitable at the reduced rate, and probably would have continued more so as time passed. The average rate before the passage of the 2-cent law was 2.35 cents per mile.

It can not be determined whether the reduction of revenue was actually affected by merely stating a rate was reduced a certain per cent. Such statement takes no account of any increase in business that might have been stimulated by the lowering of the rate. In the Northern Pacific case it is made to appear that the increase in State passenger business more than made up the lowering of the average rate. I could go into this matter more fully, but do not wish to try the Minnesota case before the committee. It is now before the Supreme Court, and will be tried there, and no doubt rightfully determined.

But I might add that it is conceded in the Northern Pacific and Great Northern cases if all the State rates were in force on Minnesota State business, each of these companies could pay the interest on all