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HOUSE OF REPRESENTATIVES,

COMMITTEE ON THE DISTRICT OF COLUMBIA,
Thursday, May 3, 1928.

The committee met at 10.30 o'clock a. m., Hon. Frederick N.

Zihlman (chairman) presiding.

The CHAIRMAN. The committee will be in order. Mr. Clayton will be the witness for the committee this morning. Stand up and

be sworn.

TESTIMONY OF WILLIAM MCK. CLAYTON, CHAIRMAN, PUBLIC UTILITIES COMMITTEE, FEDERATION OF CITIZENS' ASSOCIATIONS

(The witness was duly sworn by the chairman.)

Mr. REID. I would like to ask, Mr. Chairman, whether or not this hearing can be concluded within the time set in the motion.

The CHAIRMAN. I will state, Mr. Reid, that the only requests for hearing the chair has are these: The president and secretary of the chamber of commerce, who state they do not want much time; the chairman of the committee on public utilities of the board of trade, Mr. Jesse C. Adkins, and Mr. Cottrell, the secretary of that organization, wish to make very brief statements; Mr. Dickman, chairman of the legislative committee of the Central Labor Union, desires a hearing, and also the secretary of that organization; the parent-teachers association of the District of Columbia has asked for 10 minutes to speak in behalf of half fares for the school children. Those are the only requests for hearings.

Mr. CLAYTON. Mr. Chairman, I have a communication, for what it is worth, from the Federal Employees Union, from Mr. Newman, of their committee, wishing to have at least 5 or 10 minutes. Then there are several other organizations who, I am sure, feel they would like to and expect to be heard, but I do not know just what their request is.

Mr. REID. Can we ask the Chair to notify every one interested to send their names in time so that they may be noted. May I also ask when will the committee meet next time?

The CHAIRMAN. Well, the Chair is of the opinion that the committee would not meet this afternoon, but meet to-morrow morning.

Mr. REED. And, further, is the Chair undertaking to get a legal opinion or somebody's legal idea of what the authority of this committee is beyond the direct wording of the act of 1925, and when we might have the benefit of that opinion?

The CHAIRMAN. That has been taken up. I have not received any opinion yet. I will telephone the Corporation Counsel and also the counsel for the Public Utilities Commission and hurry it up, if possible.

All right, Mr. Clayton.

Mr. CLAYTON. Mr. Chairman and members of the committee, I had prepared a written statement but which, after consideration, I decided not to present as a written statement. I am open to questioning by the members of the committee. However, there is a preliminary statement that I think is proper to be offered at this time, but during the presentation of it I would welcome, along the lines of

questions, anything that may be in the minds of the members of the committee.

I presume at first I should state just what I understand my position to be here: I am the chairman at this time of the public utilities committee of the Federation of Citizens Associations.

Mr. GILBERT. As the gentleman from Illinois says, he has to leave in 15 minutes. Therefore, I suggest that he proceed to ask the witness some questions.

Mr. CLAYTON. Very well.

Mr. REID. Mr. Clayton, you were here the other day when I asked Mr. Roberts this question: Have you made up your mind in regard to the consolidation, whether you would rather take this or take nothing, so far as the street-car riders are concerned?

Mr. CLAYTON. Yes.

Mr. REID. Will you tell the committee your position on that? Mr. CLAYTON. Why, I would say a thousand times, no-not this pact as it stands.

Mr. REID. Now, tell us why.

Mr. CLAYTON. In the first place, it is a company proposition.

As

it went to the Public Utilities Commission, it was almost a foreclosed proposition, as we understood it; in other words, it was a permissive merger, but it was an agreement between the companies as to what they would take and, as I understood the case before the commission, it proceeded along that line. Consequently, as I understand it, what the people desire is not in this merger compact.

Mr. REID. What is not there?

Mr. CLAYTON. What is not in it for the people?

Mr. REID. Yes.

Mr. CLAYTON. In the first place, there is no assurance as to trackage; I mean the different arrangements of trackage; and we have

no

Mr. REID. Could not that be put in the agreement?

Mr. CLAYTON. Why, yes.

Mr. REID. How could you write that?

Mr. CLAYTON. Well, there could be some assurance made in the charter. Another thing, Mr. Reid, at the time we discussed it we always believed, at least I did and others agreed with me, in the discussions before the commission, that when matters we had brought up that we thought should be discussed and considered and possibly granted for the people, that they would be considered in the charter of the company when written.

Mr. REID Answer the direct question: Do you think it is possible or practicable or in any way necessary to write any trackage arrangement in the charter?

Mr. CLAYTON. I do, as it is in the charter of every street railway passed by Congress in this book [indicating].

Mr. REID. In what way?

Mr. CLAYTON. In every way.

Mr. REID. Well, tell me what charter provision there has been as to the trackage arrangement.

Mr. CLAYTON. Do you want me to read it?

Mr. REID. You do not need to read it; just tell me.

Mr. CLAYTON. It provides for all that there shall be sufficient service of first-class cars, and there is one provision in these charters for free transfers between them and every other street railway.

Mr. REID. Now, the first part is covered by the public utilities act. The public utilities act gives the Public Utilities Commission authority to supply first-class service, does it not, or in consideration of this do you wipe out the public utilities act?

Mr. CLAYTON. I think the public utilities act is being wiped out by this agreement to some extent; it is being breached to some

extent.

Mr. REID. Just answer the questions as you go along. The trackage arrangement is provided now in the public utilities act, is it not? Mr. CLAYTON. Yes.

Mr. REID. So it is not necessary to write that in; that is covered by the Federal law now?

Mr. CLAYTON. If you want me to say it is fully covered in that act, I would say no.

Mr. REID. What would you say?

Mr. CLAYTON. It is not fully covered.

Mr. REID. That is, the amendment to the act and not the amendment to this unification. You do not understand that the Congress owns the District of Columbia street cars?

Mr. CLAYTON. No.

Mr. REID. Then, consequently, they have private rights that have to be adhered to?

Mr. CLAYTON. Yes.

Mr. REID. We can not go in and take the place of the managers of either company?

Mr. CLAYTON. No.

Mr. REID. The Supreme Court of the United States has so held? We can only approve or disapprove; we can not make them enter into any agreement; is not that your idea?

Mr. CLAYTON. No, that is not my idea at all.

Mr. REID. Now, what is your idea?

Mr. CLAYTON. I believe Congress controls the situation here in so far has always asserted it up to this time-this railway situation is concerned, that it can do pretty nearly what it wants to do, within the law always, of course.

Mr. REID. That is what I am asking. What right would this committee have or Congress have to say in regard to the things you are complaining of?

Mr. CLAYTON. Here is one of the things that I think they couldand I think possibly you might agree with me on that-it is, on one point and maybe on the other-in the mooted question of reduced fares for children.

Mr. REID. I agree that ought to be in there, but I doubt whether we can put it in this.

Mr. CLAYTON. If you are of the opinion we can not get it absolutely, we are told by the commission, and I think their legal position is correct, that they have not the authority under the utilities act to grant it; that removes it from their jurisdiction; they are through with it, and we have been so notified. Now comes the time when they are, as I understand it, writing the new charter. Instead of coming up to Congress, which we had to do to get the policemen and firemen

to ride free, we say "Now is the time to get the reduced fares for the school children. If you do not get it now, we can not be running up to Congress, especially not under a local charter."

The CHAIRMAN. Does the matter of fares for school children make any difference to the companies.

Mr CLAYTON. Oh, it would, financially, yes. I do not know whether that is an argument.

The CHAIRMAN. Would not that simply put a higher rate on adults? Mr. CLAYTON. No, I do not think it would be a loss. My opinion is this: It is comparatively small; it is not a large sum like $400,000 or $500,000, and I think the increased rides that would be brought about by the school children taking advantage of the reduced rates where they could not pay the full rate, would offset the loss to the company to a great extent. They might split even on it. There is a possibility there.

The CHAIRMAN. Could not the Public Utilities Commission in fixing rates of fares establish a half fare for school children? Mr. CLAYTON. No, they say not.

The CHAIRMAN. What is their position?

Mr. CLAYTON. They say right off-and I agree with them—that the law does not contain police power enough for that—the Public Utilities Act.

The CHAIRMAN. Does not give them sufficient power?

Mr. CLAYTON. They say not, and I agree with them.

Mr. REID. That ought to be amended, the public utilities act, if Congress is going to act. That is what I was trying to tell you.

Mr. CLAYTON. Why not, instead of amending the act, if you will do that and want to take up the time of Congress? Now is the accepted time; now is the hour of salvation. Here you are writing a charter.

Mr. REID. We are not writing a charter at all. The law gives them the permission to try to make an agreement to unify, to do that which you and I have been trying to force them to do for a great many years. We have not any right to make that agreement to them, have we?

Mr. CLAYTON. You have the right under your supervisory powers or whatever you want to call it, merger, agreement, or unification— you have the right to supervise and see that it is made acceptable to Congress. We assert on behalf of the people that there are certain things not in it which we want in. You can say yes or no, but you have the right to consider them, and we ask you now, whether it is to be a local charter of congressional charter, to see that provision is made for reduced fares for school children.

Mr. REID. If Congress refuses to act upon this at this session, can there be any consideration by the company, by the Public Utilities Commission, or anybody else as to a new unification agreement? In other words, would it not be left up in the air and delayed that much longer?

Mr. CLAYTON. I believe this, if you want an answer to that-
Mr. REID. That is the reason I asked it.

Mr. CLAYTON. Yes. When we went before the commission on this unification agreement, we understood at first that it could not be varied, that it could not be changed. I think the commission at first understood it that way. We found afterwards that they were

open to suggestions-the companies-from the commission; and one change was made which was a vital change, and agreed to by them. After that other changes were made. Now, I believe that same frame of mind prevails, that if this is left in the air I think there is an opportunity for still further conference between the Public Utilities Commission and the companies, in which further, if you may call them so, concessions can be obtained, but distinctly in the interest of the people; and we are trying to see if we can get those.

Mr. REID. Accept or turn it down before they can proceed?

Mr. CLAYTON. No; you do not have to do that; they can still continue negotiations if you do not act this Congress.

Mr. REID, How can they do that when this is before Congress specifically?

Mr. CLAYTON. I mean so far as the companies and the commission are concerned, they can hold conferences together and consider suggestions. There is no reason why they should not. Then they can come back to the next session of Congress, if they desire to, with amendments. There is nothing to preclude that.

Mr. REID. My idea, Mr. Clayton, is that the only thing before this committee and Congress is to approve or disapprove this agreement. If you are right and the others, then we are going to have to sit anew, and then if we are we can bring in other things. But up to date I am not convinced we have the right under the law.

Mr. CLAYTON. I understood

Mr. REID. Will you submit your authorities for that as to whether we have a right to write this unification agreement anew, or whether it is our duty to turn it down?

Mr. CLAYTON. I do not agree with you, Mr. Reid. I think you have that right. I think that right rests in Congress to change this in any way you think it should be changed.

Mr. REID. That is the reason I have asked your opinion and asked you to submit authorities.

Mr. CLAYTON. Of course, you have your view and I have mine; you may be right and I may be wrong. But that is my opinion, that you have the right; in other words, there is no need of hearings on either side of the Congress.

Mr. REID. I do not think there is.

Mr. CLAYTON. I say, I do not think that is the idea of the people of the District of Columbia, and I do not think that is the idea of the companies, and I do not know what is the Public Utilities Commission's opinion.

Mr. GILBERT. Why would not the value in hearings be that we would have yes or no evidence, which should be valuable in determining whether we should say yes or no?

Mr. CLAYTON. I go along with you, Mr. Gilbert, on that; but I feel regret, because we still believe it is possible to work out some arrangement, and if it is simply a fiat, yes or no-If the "no" comes, then we are out altogether; if it is "yes" we feel aggrieved. If Congress has the right to accept amendments which we believe should be made, then we can probably work toward an end to get it.

Mr. REID. Now, what constructive suggestion have you got to make that we can bring about these things that you think the people desire? That is what I want to know-what constructive suggestions that we can bring about agreements under the 1925 law, which

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