bonds and put them upon the market, and after so doing how is the Government to protect itself against this watered stock? Is there any protection for the Government if afterwards it determines to take over the railroad as an owner? How is it to protect itself against the watered stock when the Government has sat by and permitted and allowed a new issue?

Commissioner ANDERSON. Mr. Chairman, that assumes that the Government is going to sit by and permit the issuance of watered stock, which I should not easily assume. I should expect that power vested in the President in line 15 would be so exercised that no securities could be offered which did not represent sound values.

Mr. DILLON. Then you would favor putting that provision into the law, would you?

Commissioner ANDERSON. No; I think that power is broad enough as it is here. I think the implication is sufficient.

Mr. DILLON. The reason I asked you that question is I think we are entering the wedge for ownership of these railroads, and the time therefore to protect the Government is now.

Commissioner ANDERSON. That may or may not prove to be so, but I come right back to what I stated a moment ago. You can not look at the power granted under section 7 without regarding it as a great power with very many implications. You can not consider the problem of war control as being effectively granted, so that the Government can do what it ought in justice to do to the general public or to the owners of the securities outstanding with the various carriers, or deal with the future, unless power to finance pending war control is given.

The CHAIRMAN. If there are no more questions you can proceed with section 8, Mr. Anderson.

Commissioner ANDERSON. Section 8, I think, is very simple. It

says:

That the President may execute any of the powers herein and heretofore granted him with relation to Federal control through such agencies as he may determine and may fix the reasonable compensation for the performance of services in connection therewith, and may utilize the personnel and facilities of the Interstate Commerce Commission, and call upon members of such commission, or any of its employees or employees of any department of the Government for such services as he may deem expedient. No such Federal official or employee shall receive any additional compensation for such services.

That is a general enabling power.

Section 9 provides with relation to the workmen's compensation act, and we have redrafted that to make it a little broader than it now is. It provides, as we have redrafted it, that while carriers are under Federal control, that the President may determine whether and on what terms and conditions, giving due consideration to remedies available to employees under State compensation laws or otherwise, that the Federal workmen's compensation act of September 7, 1916, shall be applicable to carrier employees.

That is a question of a good deal of importance, but I do not want to make any lengthy address concerning it. There is a general Federal workmen's compensation law, passed in 1916. The law relative to railway accidents is now in a state of a good deal of confusion. It seems to us that the proper way to deal with it in this bill is to grant power to the President to make the outstanding law applicable to

Federal employees available to carrier employees if after careful and discriminating study of it, and with the assistance of those that have been through that field of inquiry, it be found desireable. Some method just and adequate to take care of the victims of railway accidents must be worked out. There is now no adequate or approximately uniform method. We believe that this is a grant of power which will enable that difficult subject to be adequately and justly dealt with.

Mr. Escн. Mr. Anderson, under the accident reports, there are many hundred of railway employees killed and many thousands injured yearly. You are to apply the compensation of September 7, 1916, to them. Under that compensation act they would be entitled to medical attendance, supplies, hospital service, and I think funeral benefits. It is your idea that all of those benefits should be applicable to injured railroad employees and the heirs of those that have been killed?

Commissioner ANDERSON. This is not a mandate. It is a grant of power. It authorizes the President. It does not require him to extend that act to carrier employees on whatever terms and conditions shall be found equitable, having due regard to other remedies to which they may have recourse.

It is true that there were 2,600 or 2,700 deaths on the railroads in the year 1916, and 178,000 accidents reported, and that the accidents and deaths reported are probably under rather than over the actual facts. It is true that it is a mater of very serious import to the employees and to the finances. We do not feel prepared at the present time to make any specific all-inclusive and all-exclusive recommendation to this committee as to what should be done. We limit ourselves by saying that that matter was dealt with as to Federal employees in September, 1916, and that it is desirable that the power be granted to the Federal control to extend that act on such terms and conditions, having reference to other outstanding or available remedies, as may be found desirable.

Mr. BARKLEY. Do you think, Mr. Anderson, that the President would have the power if he extended this act of railway employees, to modify its application in any particular, or would he have to extend it precisely as it applies to Government employees?

Commissioner ANDERSON. I think that the language, "on what terms and conditions," is a very broad power.

Mr. DECKER. Have we a right to delegate that legislative function to anybody, even the President, if we wanted to, Mr. Anderson? Commissioner ANDERSON. I should think so.

Mr. DECKER. In other words, have we a right to pass a bill saying how much a man shall get if he loses his leg, or how much his widow shall get if he loses his life, and fix it so he is bound by it?

Commissioner ANDERSON. Yes, I think so, and the State laws practically come to the same thing.

Mr. DECKER. Do they not set limitations in there as to how much or how little a man may get?

Commissioner ANDERSON. Oh, yes.

Mr. DECKER. Under that substitute that you suggest there, do you not give the President the right to modify that? I would be as willing to leave it to him as to anybody, but can we shirk that responsibility ourselves if we wanted to?

Commissioner ANDERSON. Of course there are limits to the power of delegation of legislation. I do not think we have passed beyond them here. I had occasion a few years ago to consider and write some theses on the question of the constitutionality of compensation acts. It has gone a little stale in my mind. As a general proposition, most of the courts have sustained it. The New York court held it unconstitutional at one time, and then under a slightly different act they made a different ruling. Some people think that they reversed their position in the later decision.

Mr. DECKER. Let me ask you another question. Just to finish the other question that I had asked. Have you thought of whether it might not be better to leave the railroad men of the country to their present remedies which, in many cases, are pretty valuable to them, rather than to undertake at this time, without the fullest consideration, to change their rights and remedies by giving the President the power to extend the provisions of another act, the efficacy of which when applied to railroads has never been considered by this committee, or by Congress? In other words what injustice would be done for the President just to leave the railroad employees to their present rights and remedies until we can at least go into that far-reaching subject in detail?

Commissioner ANDERSON. Because the present rights and remedies of the railroad employees are, as I am informed, in a very highly chaotic and very unsatisfactory state. You will find a decision of the Supreme Court of the United States, made, I think, last June, in which the court split, as I remember it, five to four, on the question of the law now applicable to railroad employees. And it is in a very, very, chaotic state. I have undertaken in the brief time that I have been at this to get some illumination. I have a valuable memorandum here, prepared in haste, by the chairman of the Federal Workmen's Compensation Committee, and we are working with him to try to see what ought to be done. I must limit myself by saying that up to the present stage I am unwilling to go further than to say that I think the power should be granted to the President to extend that, after such investigation, and it may prove to be an investigation of several weeks of study by those who are now best advised on that, and after such study as may be found desirable. That something ought to be done, I am convinced. Just what ought to be done, I do not know.

Mr. DECKER. You understand my position, and I think the position probably of most of the Members of Congress would not be so averse to a compensation law, but I would have great doubts on the spur of the moment whether that law that we passed for Federal employees, like those in the civil service, and so forth, would be adequate or necessary or wise to apply to railroads.

Commissioner ANDERSON. I should have doubt enough so I should certainly want to hear the parties in interest and people who are better advised on it than I am before I ruled on it.

Mr. DECKER. With the profoundest respect for the President, I do not know whether we would be justified in putting that burden on that, just from the standpoint of time.

Commissioner ANDERSON. It has to be investigated, of course, by somebody else, but our view was that this legislation ought, in the public interest, to be passed as soon as possible. I think everybody

will agree to that. It is very important in its effect on the general public interest, and particularly upon the security markets. Hence we said when it comes to this question of industrial accidents, it is clear that the present status is highly undesirable. How can we deal with it? We are not prepared to say that the workmen's compensation act ought to apply. The most we could dare to say now is that the President should have the authority to make it apply on such terms and conditions, having regard to other available remedies, as may be found desirable.

Mr. Escн. Mr. Anderson, under the compensation act of September 7, 1916, the burden is put on the Federal Treasury. Is it your plan that the $1,000,000 necessary to make compensation to railroad employees should be a charge on the Federal Treasury or should be a charge on the carriers?

Commissioner ANDERSON. I think the railroads should be operated under Federal control so as to be entirely self-supporting, and that the industrial accidents is as much a part of operating cost as wages. Mr. Escн. Then you differentiate between the two?

Commissioner ANDERSON. Yes.

Mr. ESCH. Under the workmen's compensation law, the Federal Government pays. Under your suggestion, you would put that charge upon the carriers?

Commissioner ANDERSON. Yes; but it would not follow that it would come out of the Treasury because the compensation law was made available.

Mr. ESCн. Your idea is that the Federal compensation law would be used as a basis by the President in fixing really a compensation law for the railroad employees?

Commissioner ANDERSON. Yes. And my idea also is that as a matter of accounting it should be charged as a part of operating. 'expense of the various carriers.

Mr. STEPHENS. In effect, then, Mr. Anderson, the President would fix the compensation; that is, he would take into consideration the laws as they now exist, but under this act he would have the power to fix the compensation independently of legislation.

Commissioner ANDERSON. He could not certainly go beyond the limits set by the act of September 17, 1916. If it should be found that the carriers and employees in a certain State had a State law which was reasonable and just, approximately like that of the Federal, it might be quite conceivable that the injured employee should be required to elect as to whether he should seek his remedy under the State or under the Federal law. He should not be given a duplicate remedy.

Mr. STEPHENS. Then the President could not make rules and regulations, or create a method of compensating of these people that would exceed the present existing laws?

Commissioner ANDERSON. I do not think so, yet, as this is passed in that form.

Mr. DEWALT. I think, Mr. Anderson, the difficulty possibly is one more of ideal than it is of practical solution. Under the State laws with regard to compensation the injured man now has the right to select his remedy. He has the right to avail himself of the compensation law, or he has the right to sue and recover his verdict, and almost universally the records will show that the injured party has

accepted the compensation law and the provisions thereof, so here this, I think, might be cured by saying that the railway employee should have the right of election as to whether he would take the State law or whether he would take the Federal compensation law. Commissioner ANDERSON. I should not quite dare to draw it in that form and put it into this bill.

Mr. DEWALT. That general thought, I mean.

Mr. COOPER. May I ask a question? While touching on the employees of railroads, I do not think that is covered in this bill. We have now our safety appliance laws, the hours of service law, and this has been asked: "Has the Director General of Railways the power to set aside those laws?"

Commissioner ANDERSON. Under the present power?
Mr. COOPER. Yes.

Commissioner ANDERSON. The safety appliance law?

Mr. COOPER. Yes, and the hours of service law, and who is going to enforce these laws?

Commissioner ANDERSON. The laws are being forced precisely as hitherto. As a matter of fact, under the proclamation it is provided in substance that until and unless otherwise ordered they shall continue as hitherto, and as the very next section of this act here, section 11, continues the same status. Whether or not under the war powers the hours of service law could be set aside, I should answer that question in the affirmative. It could be. It would be inconceivable, I take it, to anybody, if the Government were removing troops to repel an invasion that men could quit on the eight hour law.

Mr. COOPER. May I ask a further question? Supposing now that the inspector of the Interstate Commerce Commission finds, since the Government has taken over the railroads, a violation of the safety . appliance law. Who will they prosecute?

Commissioner ANDERSON. The carriers, the same as they are now, and you will find that referred to section 11. There is language in the proclamation which reserves the right.

Something was said about the compensation act. I do not want to spend time unless you wish on that.

The CHAIRMAN. Just a moment, Mr. Anderson. It is now nearly 12 o'clock. Would you prefer to go on and complete your statement now?

Commissioner ANDERSON. I am at the service of the committee. I had expected, and I may say hoped to complete, but I am here to help out this bill, and if the fact that I have studied it somewhat makes it desirable for you to have me here longer, I am at your service.

(Whereupon, at 12 o'clock noon, a recess was taken until 2

p.

m.)

AFTER RECESS.

STATEMENT OF COMMISSIONER GEORGE W. ANDERSON-Resumed.

Mr. DOREMUS (presiding). You may proceed, Commissioner Anderson.

Commissioner ANDERSON. Referring for a moment to the workmen's compensation status, if the committee will look at the case