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The CHAIRMAN. Mr. Eicher.
Mr. EICHER. How could that paragraph be so construed, when it contains the words “whenever it can do so without prejudice to the efficient and proper conduct of its affairs." Those seem to be adequate limiting words, I should say.
Mr. MALTBIE. I did not construe those words that way. I understood those words to mean that if the Commission had a staff, had funds to do the work, and could do it without interfering with the regulations of interstate commerce, then it could go on to something else. Now, if those words write into this section an absolute limitation upon the Commission that it cannot go beyond the interstate commerce in the section, it is not necessary, because all of those powers are conferred, or are attempted to be conferred, over interstate commerce in other sections of the bill.
Mr. MARTIN. May I ask a question ?
Mr. MARTIN. I would like to ask a question. Assuming that the language goes beyond the powers of the Commission, but that the Commission exercised the power, made an investigation, determined the cost, and acquired this information, and its action in so doing was not questioned. What difficulties would you encounter in a rate case under the State law in endeavoring to get that information into the record? Could you get that information into the record and have it used as a part of the legal evidence in the case, over objection, over legal objection?
Mr. MALTBIE. If I understand your question, yes; because the way you would do it would be this: Assume the Federal Power Commission has made an investigation, presumably it has made it through men who have qualified to testify as experts and if called to the witness stand could qualify. They would be called to the stand. Now, if there were objections made that these men could not testify because as agents of the Federal Government they have gone beyond the jurisdiction which can be conferred upon the Federal Government
Mr. MARTIN. That is what I had in mind.
Mr. MALTBIE. That is what I thought. It seems to me-I skirted the legal profession. I am not part of it.
Mr. MARTIN. A lot of us lawyers are in the same boat.
Mr. MALTBIE. Sometimes it is an advantage not to be a lawyer; sometimes it is a disadvantage.
But, I would say that the witness would be allowed to testify. We are not limited to the strict rules of evidence. He would be allowed to testify as to facts and as to opinions, if he could qualify. It could not be introduced as the opinion of the Federal Power Commission, as a commission, because there is no witness to be called. The opponents have not had their day in court. You have to have a man there who would testify as to the facts and be prepared to stand cross-examination on the facts; but it could be gotten in that way.
Ï do not think that the objection that it had been done beyond the powers which the Congress can confer would prevent that man from testifying.
Mr. MARTIN. That is, testifying before your State commission ?
Mr. MALTBIE. That is right.
Mr. Martin. But if exceptions were taken there and the action of your commission got into court, you are not certain what the result would be there, are you?
Mr. MALTBIE. Weil, I am pretty certain. We are not bound by the technical rules of evidence. Of course, we always give exceptions. That is just a way of saying that they disagree with the Commission; but they do not amount to anything, because they do not have to take exceptions. They can object to anything later whether they take exceptions or not.
Mr. MARTIN. All right.
Mr. EICHER. I construe that paragraph merely as giving the Commission power to spend some money to get intrastate information if in their judgment that information might be of help to them in determining interstate questions before them for decision.
Mr. MALTBIE. Well, we are skirting a bigger question just now, too, but it does not seem to me that the Congress can confer power upon a Federal Government to do something the Federal department has no jurisdiction over and which the Federal Government has no jurisdiction over.
Mr. EICHER. Of course, that would involve the question of whether there was a sufficiently direct relationship between the two so as to enable the Federal Power Commission to go into the intrastate field.
Mr. MALTBIE. Then, you come to the question of implied powers. And, of course, I am not attempting to dispose of the question raised in the Shreveport case, either, as to whether the regulation of the rates of interstate commerce in natural gas might not carry with it the regulation of intrastate rates under the conditions described in the Shreveport and Wisconsin cases. There is nothing of that in the bill as yet.
Mr. EICHER. It is not in the bill?
Mr. MALTBIE. Not at all in the bill as yet; nothing about that which those cases imply.
Now, passing on to sections 6 (a), 6 (b), 7 (a), and 7 (b), and 7 (c), I have in my mind a somewhat similar objection. You will notice that in section 7 (b), there is a limitation in the second line of the paragraph:
No natural-gas company shall abandon all or any portion of its facilities subject to the jurisdiction of the Commission.
Now, that limits that paragraph to facilities under the jurisdiction of the Commission. That is facilities that are a part of the interstate gas business. But, in sections 6 (a), 6 (b), and 7 (a), there is no such limitation, and unless that is read in by inference, which is stretching it a good deal, unless that limitation were read into those sections, there is in those sections a conference of authority on the Federal Power Commission over intrastate business and intrastate facilities.
Now, possibly the person who drew this bill did not have in mind that a company may be engaged both in interstate commerce and in intrastate commerce, and that the facilities used for interstate commerce may be entirely separate from the facilities used in intrastate commerce; but that is a fact. There are cases where a company
has developed a natural-gas field and the facilities, connecting with that field, and the distribution of the gas is in interstate commerce. It crosses a State line, but the company also has wells in other territory connected with pipe lines going to a local distributing company, and that is not interstate commerce.
That is intrastate commerce, and over which the State has control.
Now, if sections 6 (a), 6 (b), and 7 (a) were so modified as to carry into the law the language used in 7 (b), it would remove the objections that I am speaking about, but inasmuch as it is put in 7 (b), the inference would be, ordinary construction of the statute, would be that 6 (a), 6 (b), and 7 (a), not having it, are not bound by it.
Mr. COLE. Mr. Chairman-
Mr. COLE. May I ask a question there? In 7 (b) are you not dealing with facilities, and when you read sections 6 (a), 6 (b), and 7 (a) you naturally go back to the definition of what a natural-gas company is before the provision applies?
Mr. MALTBIE. Yes.
Mr. COLE. And are limited absolutely in this case to what we define as natural-gas companies. Does that not cure your objection?
Mr. MALTBIE. I think not. I tried to make the point, without spending too much time on it, that power is not conferred by a company. The Federal Constitution gives power over a thing. That is interstate commerce. And, a company that is engaged in interstate commerce is not completely, in all of its business that it does, necessarily under the regulation and adıninistration of the Federal Government.
So as I said, a company comes under the jurisdiction of the Federal Power Commission for the business of interstate commerce, but if it does interstate commerce, the mere fact that one company does both things, does not place the intrastate commerce under the jurisdiction of the Federal Government.
The CHAIRMAN. Your view is that for investigative purposes where it is confined to that, this carries the investigating power, I take it.
Mr. MALTBIE. I think unquestionably it does, because the property is used, let us say, in part, like an office building where the offices are for the part of the company that is engaged in interstate commerce : and the part for intrastate commerce. Undoubtedly the natural construction either for the Federal Government or for the State would permit either one to investigate the operations of that property that was used in part in intrastate commerce on one hand and interstate commerce on the other.
I am raising no question about that. I am raising the question pout property that is not, by any reasonable construction of interstate commerce, under the jurisdiction of the Federal department.
Mr. WADSWORTH. Mr. Chairman-
Mr. WADSWORTH. Have you suggested any amendments or corrections to those sections, Mr. Maltbie?
Mr. MALTBIE. I have not.
Mr. HALLECK. I think that that should be done.
Mr. MALTBIE. I will submit them. Will you give me a week, Mr. Chairman, to submit them?
The CHAIRMAN. Well, we would be glad if you would do it as soon as you can.
Mr. MALTBIE. I will. I want to submit them to counsel before I turn them in.
Mr. BOREN. Mr. Chairman-
Mr. BOREN. In substance, what you are indicating was that this clause subject to the jurisdiction of the Commission should be inserted in the language of subsections (a) and (b) of section 6, and subsection (a) of section 7.
Mr. MALTBIE. Or words to that effect. You might have to change the wording, because the other sections are worded a little differently; but that is the idea, precisely.
I wish to say this, that we have had some experience with attempting to regulate interstate business, in regulating the rates of companies that are distributing companies in the State of New York and who get their gas from over in Pennsylvania.
Now, that involves only two States in this case. That is New York and Pennsylvania. But unless the Pennsylvania company is. willing to place at our disposal their records and property, there is no way that we can get them; and if they refuse, of course, no subpena can run outside of the State. Their books and records are outside of the State and we cannot reach them, and if the Federal Government undertook to deal with, adequately, with interstate commerce in such instances, it would be of great help to us.
We have found ourselves almost stymied by these companies that are outside the State.
Mr. BOREN. That refers back to subsection 5 (b), and Mr. Burton, I believe it was, gave a considerable statement, in his evidence, showing where there was need for the subsection, and I asked him the question there in connection with one that you mention here of cooperation between the State commission, if that would not be a practical solution of that problem, and he pointed out the language necessary in subsection 5 (b) which was necessary to meet that.
Mr. MALTBIE. I do not think so. In the case I mentioned, the Federal Power Commission, if given adequate powers by the Congress, the Commission would determine, investigate, and determine the reasonable price of gas at the end of the New York line. They would determine that without any help, and without any question this bill will provide that. Yet outside of 5 (b) this bill provides that now that they determine that price at the end of that line.
Now, that is their business, so far as we are concerned, that seems to be res adjudicata. We have to accept that decision, because a Federal department is acting in something that it has jurisdiction over, unquestionably, interstate commerce.
It decides that price at the end of the line.
Now comes in the distribution company which we have control over, go into all of the things that have to be gone into in determining a rate. You start with the price decided by the Federal Power Commission and we do the rest, taking it down to the consumer.
That leaves the Federal Power Commission in its own field to act as it may be authorized. It leaves the State commission in its own field to act as it is authorized.
Mr. BOREN. If the Federal Government does take this burden and give you the reasonable rates at the end of the line, engaged in interstate traffic, you no longer have any need for information concerning the Pennsylvania end of the problem so far as your State commission is concerned, would you?
Mr. MALTBIE. That is right unless, perchance, the operating company might happen to be a Pennsylvania company, but we do not look with favor upon that. Assuming that the company is a New York company, we have got all of the authority we need right there.
Now, section 8. I will try to hurry through. Section 8 (a), page 11. The language that I think there is objected to is about twothirds of the way down the page. It provides that:
The Commission, after notice and opportunity for hearing, may determine by order the accounts in which particular outlays or receipts shall be entered, charged, or credited.
I am aware of the fact that this language is, as used here, in other acts of Congress regulating Federal departments, but a company exclusively operating in interstate commerce would not be touched by the State commission and there would be no conflict of jurisdiction.
I said exclusively operating in interstate commerce, because no State commission then would have any jurisdiction over it. But, the trouble will arise where a company is engaged both in interstate commerce and intrastate commerce.
This is not limited. This provision and this whole accounting section is not limited to corporations engaged exclusively in interstate commerce. It covers corporations engaged in intrastate commerce as well.
Now, it certainly is right and proper for the State commission to regulate some of these things in the case of intrastate commerce, but this gives jurisdiction over the company and over things that the company does and it is not limited to interstate commerce.
In New York, the New York commission has authority in this very language—in fact, I think this was taken into the Federal acts from the New York commission's act, the New York public service law.
What happens? We have jurisdiction in almost the precise language to do the same thing and this is not limited to interstate commerce.
I am perfectly aware that when you come to a company doing business both interstate and intrastate that any one act or many of the acts may include items relating to interstate and intrastate; but suppose the Federal department says that an account should go into one account; suppose that the State commission says that it should go into another account? Facing that situation we have in those cases, where the companies are predominately interstate commerce and we have said to the Federal department, take it. We will keep our hands off even thougli the laws gives authority; but it does seem that it is rather stretching it a bit to authorize a Federal Department to go down into the very items of expenditures in a company doing, let us say, 80- or 90-percent intrastate business.