To the Senate and House of Representatives:

A recent effort by a large number of railroad companies to increase rates for interstate transportation of persons and property caused me to direct the Attorney-General to bring a suit and secure from the United States court in Missouri an injunction restraining the operation of such increased rates during the pendency of the proceeding. This action led to a conference with the representatives of the railroad companies so enjoined and the agreement by each of them to withdraw the proposed increases of rates effective on or after June 1, and not to file any further attempted increases until after the enactment into law of the pending bill to amend the interstate-commerce act, or the adjournment of the Congress; with the further understanding that upon the enactment of such law each would submit to the determination of the Interstate Commerce Commission the question of the reasonableness of all increases that each might thereafter propose. It is my hope that all of the other railroad companies will take like action. In order, however, that each may have the benefit of a speedy determination of the question whether or not its proposed increases in rates are justifiable, provision should be made by Congress to vest the Interstate Commerce Commission with jurisdiction over such question as soon as possible.

In the Senate amendment to section 15 of the act to regulate commerce, contained in H. R. 17536, the Interstate Commerce Commission is empowered, immediately upon the filing of a proposed increase in rates, of its own motion, or upon complaint, to enter upon an investigation and determination of the justice and reasonableness of such increase, and in case it deems it expedient to suspend the operation thereof for a period specified in the section to enable it to complete such investigation. That bill, however, provides that the act shall take effect and be in force only from and after the expiration of sixty days after its passage.

This provision, if allowed to remain in the bill, would enable carriers, between the time of enactment of the bill and the time of its taking effect, to file increases in rates which would become effective at the expiration of thirty days, and remain in effect and be collected from the public during the pendency of proceedings to review them, whereas if the bill be made to take effect immediately such investigation will have to be made before the public is called upon to pay the increased rates.

I therefore recommend that this latter provision be modified by providing that at least section 9 of the Senate amendments to the bill, which is the section authorizing the commission to suspend the going into effect of increases in rates until after due investigation, shall take effect immediately upon the passage of the act.

WILLIAM H. TAFT