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Mr. PETTENGILL. Here is your pipe-line company which comes in from outside the State of New York.
Mr. HUNT. Yes.
Mr. PETTENGILL. That comes into the distributing company. You mix the gas with artificial gas.
Mr. HUNT. Yes.
Mr. PETTENGILL. And at that time there is not a sale in interstate commerce; that is a local transaction.
Mr. Hunt. The sale by the pipe line, interstate pipe-line company is to the Syracuse Light Co.
Mr. PETTENGILL. But you are not selling in interstate commerce; you are selling locally. You are selling at the point where interstate commerce leaves off.
Mr. HUNT. I was under the impression the situation is this, the sale by the interstate pipe-line company might be said to be in interstate commerce—the sales by the Syracuse Lighting Co. are, I believe, wholly intrastate. My point is that the wording of the definition is not entirely clear that such sales by the Syracuse Co. are exempted from the bill. The sales of natural gas to the Syracuse Co. might be said to be in interstate commerce.
Mr. WADSWORTH. The sale at the gate?
Mr. WADSWORTH. Yes; my impression was the regulation of the gate rate was to be accomplished under the interstate-commerce clause.
Mr. Hunt. My point, Mr. Wadsworth, is not whether the sale at the city gate is involved but the subsequent sales by the purchasing utility company. To four local companies which distribute the mixed gas.
Because of these sales it is possible that the definition as it now stands could be said to include those sales.
Mr. WADSWORTH. Those sales are now subject to the jurisdiction of the Public Service Commission of New York?
Mr. HUNT. They are subject to regulation by the Public Service Commission of New York. By inserting the words "in interstate commerce” after the word “sale” in line 3, on page 3, it would be perfectly clear just what the intent of that section is. I believe it is the intention of the committee not to include such sales as are made by the Syracuse Co. Mr. MARTIN. May I ask a question? The CHAIRMAN. Mr. Martin.
Mr. MARTIN. A somewhat analogous amendment was offered here yesterday to be inserted in line 9 on page 2, where the witness representing the company said they acquired gas in Illinois from the interstate line and then sold it to other local companies.
Mr. HUNT. I think so.
The CHAIRMAN. In that connection, I take it the particular object of the clause you refer to there is not to exempt natural gas simply because it was mixed with artificial gas, and your real object in offering that language is that as it now stands you are apprehensive that
it would bring in some intrastate transactions within the jurisdiction of the bill.
Mr. Hunt. Yes, Mr. Chairman; because the Syracuse Co. are selling at wholesale for resale the kind of gas which is referred to in this definition.
The CHAIRMAN. Of course, the purpose of this bill is to reach those sales where gas is transported across State lines for the purpose of resale. You might have an intervening company that is entirely a State company.
Mr. WADSWORTH. I do not think the proposed amendment would lift the Syracuse Gas Co. out from under Federal jurisdiction in the purchase of the gas from the interstate company.
Mr. HUNT. We are apprehensive about the sales of mixed gas by the Syracuse Light Co. to four companies wholly within the State.
The CHAIRMAN. You do not want the local distributing company to fall under the jurisdiction of the Federal Government.
Mr. HUNT. That is right.
Mr. Hunt. That is, the Federal jurisdiction does not extend to the Syracuse Light Co, and the companies to which it sells, none of whom are engaged in business across State lines.
The CHAIRMAN. Yes.
Mr. Hunt. We are confining it to the Syracuse Light Co.; it buys from the pipe line and mixes the gas and then sells it to other local operating companies for distribution locally.
Mr. WADSWORTH. I would like to ask one question, Mr. Chairman. The CHAIRMAN. Mr. Wadsworth. Mr. WADSWORTH. In order to distribute gas in the State of New York you must obtain something in the nature of a certificate of convenience and necessity!
Mr. Hunt. Oh, yes; that is obtained through the public service commission before they can operate.
Mr. WADSWORTH. And is it possible for a competing company to enter into the same market area without obtaining some such permission?
Mr. Hunt. I should say not.
Mr. WADSWORTH. That is from the Public Service Commission of New York ?
Mr. Hunt. I should say not.
The CHAIRMAN. Our next witness is Mr. Bigelow, a Member of Congress from Ohio.
STATEMENT OF HON. HERBERT S. BIGELOW, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF OHIO
Mr. BIGELOW. Mr. Chairman and gentlemen of the committee, for the record my name is Herbert Bigelow. I am representing the second Ohio district. We do not know in Cincinnati whether we are paying too much or too little for gas, but we have no way of finding out. We are operating there under a short-time contract which expires in August of next year, a 3-year contract.
In 1931 we passed an ordinance fixing rates, and we were in the public-utility commission with that rate for 4 years and then we gave up in dispair of coming to any decision there. And the compromise was effected between the city and the company on a rate that has been in force, I say, for 2 years, and will expire next year. The city spent $200,000 of its money in the law suit and investigations required and in this litigation before the public-utilities commission, and our city attorney tells me that there seems to be no way of coming to any definite conclusion as to what the rate should be without putting the city to the expense of making a complete invoice of the company's property which would then take us clear into the State of West Virginia and other States to determine what their investments were, and we were, as one city, hardly in position to do that. And, I just wanted to put before your committee this statement, that Cincinnati is very much concerned with this legislation and we are delighted that it is in prospect and we are hoping that the law will go into effect, that it will be passed and go into effect and give us some remedy, which we do not now have, to ascertain what we should pay.
We are buying gas. We are buying gas through some company in Portsmouth, which is buying it from the Columbia Gas Co., through a subsidiary, the Cincinnati Gas & Electric Co.
The CHAIRMAN. I think you would agree, Mr. Bigelow, also, that the city attorney could not advise you that if you had sufficient money you would have no legal basis for going outside of your State to ascertain the value of property in another State.
Mr. BIGELOW. Yes. It is a perfectly unhappy situation we are in, if we have got to go into another rate case with these people. The present rate expires, as I say, next year, and we are hoping to get relief from such legislation as this.
The CHAIRMAN. Thank you, Mr. Bigelow.
The CHAIRMAN. We will now hear hear Mr. Maltbie, chairman of the New York Public Service Commission.
STATEMENT OF MILO R. MALTBIE, CHAIRMAN, PUBLIC SERVICE
COMMISSION, NEW YORK
Mr. MALTBIE. Mr. Chairman and gentlemen of the committee, the position of the New York commission is to favor Federal regulation of interstate commerce.
Mr. COLE. As I understand, you are a member of the New York commission!
Mr. MALTBIE. I am chairman of the commission. And, as to the extent of that power, it should be adequate to deal with the subject; but it is also our position that the conference upon a Federal department, the authority to regulate interstate commerce, should not be made the excuse of using it as an agency for transferring the regulations to it of intrastate commerce in the same commodity.
Now, as to certain provisions in this bill, H. R. 4008: It seems to us that section 5 (b) violates the statement just made, for section 5 (b), on page 8, attempts to confer upon the Commission, acting under the law, at the request of the State commission, power to investigate
and determine the cost of things which according to the very paragraph are not under the jurisdiction of the Federal department.
It is a question, of course, whether the Congress can confer upon a Federal administrative department any powers which the Federal Constitution has not reserved to the Federal Government, and certainly traffic in natural gas or artificial gas, when that is made wholly intrastate, cannot be regulated by the Federal Government. Now, it might be said that if you grant authority to a Federal department which cannot be exercised by that department, it would be invalid, but our experience is that, when there is apparent conference of a power on a Federal department, that department is prone to exercise it and let the matter go to the courts and be decided or litigated, and, of course, such a thing ought not to be left to litigation, if possible, and if that plan is not to be followed, section 5 (b) would either have to come out or be seriously modified.
Mr. WADSWORTH. Mr. Maltbie, would it correct the situation in whole or in part if the words in line 8, "upon its own motion, or”, were eliminated ?
Mr. MALTBIE. I do not think so, because that would leave it to the Commission, upon the request of any State commission. Now, a State commission cannot confer power on a Federal department, and it cannot, by requesting the Federal department to make an investigation, authorize it to do so. The only source of authority that the Federal department can get is from the Congress, and the Congress can only confer authority reserved under the Constitution or given to the Federal Government under the Federal Constitution.
Mr. MARTIN. I do not know whether I quite understood you or not. Your position is that where the Commission would have no authority to establish a rate, then it would have no authority to investigate and determine the cost factors; is that correct?
Mr. MALTBIE. That is the point. But this attempt to confer some power to investigate and determine certain things upon the Federal Government regarding matters that are not under the jurisdiction of the Federal Government.
Mr. BOREN. May I ask you a question?
Mr. MALTBIE. And the power in the other provisions in the act confer power upon the Federal Government regarding interstate commerce I think quite fully.
Mr. Borex. May I ask a question?
Mr. BOREN. You are referring to subsection (b) of section 5 that authorizes the Federal Government to make certain investigations where they have no authority for action?
Mr. MALTBIE. It seems to authorize the Federal Government to make investigations.
Mr. BOREX. Yes.
Mr. Maltele. And I do not think you have the authority to confer upon the Federal Government
Mr. BOREX (interposing). You are sperifically referring to section 5, subsection (b).
Mr. MALTRIE. Yes: that is the subertion that I am talking about. I am coming to section 6 in a moment but I am speaking now about subsection (b) in section 5.
Mr. BOREN. I am particularly interested in that subsection and I want to get your point. Your contention is simply that it is attempting to give an authorization to the Federal Government that does not rightfully belong to it?
Mr. MALTBIE. To the Federal department.
Mr. MALTBIE. There are two things, so far as interstate commerce is concerned, the facts regarding the mention in subsection (b) are covered elsewhere in the act, and so far as intrastate commerce is concerned the Congress has no authority, no power to confer that upon the Federal Government.
Mr. COLE. I would like to make this statement at this time, Mr. Maltbie, concerning that particular section. In the hearings last year, before a subcommittee of the committee on H. R. 11662, page 30, the reasons for it were given by Mr. DeVane of the Federal Power Commission in this statement:
Section 5 (b) of this bill authorizes the Commission to determine the cost of production or transmission in cases where the Commission has no authority to establish the rates. That section is simply in aid of State regulation. There are some of these companies that supply the gas locally and do not sell it at the city gates. The gas that is furnished by them to the local communities is taken from interstate pipe-lines, and the purpose of this subsection is to enable the Commission to determine for the State commission what would be a reasonable gate rate for that gas so that the local commission may be in a position to fix a reasonable consumer's rate in the locality. That is the only purpose of section 5 (b).
If this language is clarified so as to accomplish only that purpose, you would have no objection, I assume?
Mr. MALTBIE. Let me see. So far as interstate commerce is concerned, assuming this gas crosses State lines somewhere, the Congress has authority to confer upon the Federal Government the full power to regulate it. There is no question about that. And if that gas is taken off of the interstate line, let us assume for the moment that that gas flows from another State so there is no question of it originating in the State itself, but if that gas flows off an interstate line, Congress has the power to confer upon a Federal department the regulation of that business to the end of the interstate commerce, which we may say is the sale of it in the first instance without attempting to go into the minutiate, or defining just where that ends, so that if I understand your statement the Congress has the power to confer and has conferred that power in other sections. Now, if the act is an attempt, as I have stated, to help the States, if it is only a function of the State, to regulate intrastate commerce. I do not think there is any authority in the Congress to confer upon a Federal department the power to spend money to assist a State in the performance of its own functions, that is, the regulation of intrastate commerce.
Mr. COLE. As I remember it, Mr. Chairman, in the report last year on the bill, which bill contained language substantially the same as in this bill, the clear intention was stated just as Mr. De Vane expressed it. But I agree with you that the language should be perfectly clear so there would be no conflict with the State commissions.
Mr. EICHER. May I ask a question?