6. And might not Congress conclude, in the exercise of a reasonable discretion, that such legislation will have a salutary effect in the removal of causes of friction and in the promotion of harmonious relations between capital and labor engaged in a great industry, and hence greatly promote the interests of commerce? (McLean v. Arkansas, 211 U. S., 550.)

These and similar considerations would, as it seems to me, amply justify the exercise of the legislative discretion in adopting an exclusive and compulsory compensation act as germane to the regulations of interstate commerce and as an appropriate and reasonable means of wise and effective regulation.

When we come, however, to consider the special features of the legislation which should be adopted we are confronted with the legal necessity that the system adopted, in order to be constitutional, must be a reasonable and not an arbitrary exercise of the legislative discretion.

Whether considered from the standpoint of the fifth amendment or from the standpoint of the commerce power, this is essential. Thus it would not be competent, in view of the fifth amendment, to impose on a railroad company liability for injury to one of its employees inflicted by a third person in no wise connected with the employer or the employer's service, when the injury in no way rose out of that service. Now, would it be competent to do, under color of the commerce power, an act arbitrary or unreasonable in itself? As was said by the Supreme Court in the lottery case, the means must be appropriate, plainly adopted to the end to be accomplished, and must consist with the letter and the spirit of the Constitution; and, as was said in the Maguire case (219 U. S., 569):

The principle involved in these decisions (relating to the commerce power) is that where the legislative action is arbitrary and has no reasonable relation to a purpose which it is competent for Government to effect the legislature transcends the limits of its power, etc.

It is essential, therefore, that the legislation which is enacted should be a reasonable and not an arbitrary exercise of the legislative discretion.

There can be no reasonable doubt of the fact that, whatever view we may entertain as to the constitutionality of this legislation, the question will in some way ultimately be presented for determination to the Supreme Court. Those favoring such legislation should therefore be careful to present a scheme of legislation which will not incur the reprobation of reasonable men. Accordingly the act which is adopted should be fair to all interests involved. In the first place. it should be fair to labor in adopting a scheme of compensation which the just judgment of mankind can approve. In the second place it should be fair to the employer in not undertaking merely to add to liabilities, which under existing conditions are extreme, as would be done if the employer is made liable, without any compensating advantage in respect to acts as to which it has no fault. In consideration of an extension of its liability to cases beyond its control and for which it is in no way to blame, it should have an appropriate limitation put upon its liability in all cases, and the scheme of legislation should be exclusive of all other rights and remedies. The prin

ciple announced by the Supreme Court in the Oklahoma Bank case should be here invoked and applied, namely, "The share of each party in the benefit of a scheme of mutual protection is sufficient compensation for the correlative burden it is compelled to assume." (Noble State Bank v. Haskell, 219 U. S., 104.)

In other words, for the additional liability the railroads would, under the proposed legislation, be required to assume, they should, in order that the system may be reasonable, receive compensation in a just limitation upon the amount of their liability in other cases.

It should be noted that this feature was absolutely lacking in the Ives case, decided adversely to the statute by the court of appeals of New York, and it must be admitted that the case for the act would have been much stronger if the statute had possessed this element of reasonableness and fairness.

It could hardly be considered to comport with justice or with reason to leave the carrier subject, without limit, to the whims of public passion and to the influence of varying local conditions in respect to acts as to which it could not prove its freedom or the freedom of some of its employees from fault, and at the same time to impose upon it liability for acts as to which neither itself nor any of its employees were guilty of any fault at all. It is, therefore, submitted that any legislation on this subject to be just or reasonable must be based upon the idea of insurance against calamity in the general interest and not upon the idea of increasing without reason the liability of the employer when guilty of no fault, while at the same time leaving him subject to these present extreme conditions in respect to matters as to which it is impossible for him to prove that he or his employees were guiltless of some fault. An act based upon these broad, just, and reasonable conditions would be much more likely to receive judicial sanction than one based upon unjust and unreasonable principles.

Legislation adopted with a view of remedying the evils of present conditions, which are universally admited to be unsatisfactory to employer and employee, and substituting in its place an automatic system by which there shall be a just protection to the employee for every injury he receives and which shall at the same time serve in the public interest and for the benefit of an expanding commerce to do away with the economic waste involved in the present system, would, it seems to me, address itself to the sense of justice and wisdom of all thinking men. It would be manifestly better than to leave the present system as it is, full of its evils-full of its possibilities of friction between the employer and the employee, full of its inducements to disloyalty of the employee toward the employer-for I may say that it is no secret that some employees while serving the railroad interests are in the employment, as I am told, of damage-suit lawyers for the purpose of bringing pecuniary liability upon the employer which they serve-full of economic waste, cultivating a class intermediate between the employer and employee whose interest it is to create bad feeling for the purpose of calling attention to themselves as proper persons to represent an alleged wrong or for the purpose of promoting political ambitions by creating a condition of passion and prejudice against the employer, or for the purpose of creating a public sentiment that will give unreasonable and excessive verdicts.

It would remove all these things now in the path of a just and reasonable relationship between the parties, and it would be a reasonable and proper exercise of legislative discretion. Whereas to leave all these things as they are as menaces to the public welfare and simply to take more of the companies' property without any compensation to pay for things for which it had no fault, would stand the great risk of being considered an arbitrary and unreasonable exercise of legislative discretion, and therefore as an exercise of a power forbidden by the fifth amendment.

I have been speaking so far, and shall speak again, merely in my own personal capacity, but in a representative capacity it is proper for me to add, notwithstanding my convictions as to the constitutional power of Congress in the premises, that in view of the decision in the Ives case by the Court of Appeals of New York, and in view of the substantial difference of opinion between counsel as to the constitutional power of Congress to enact compulsory legislation, the way is open to this commission to avoid all questions as to constitutional power by recommending an elective system, because a company electing to be governed by the legislation would, by its acceptance, be barred from objecting to its constitutionality

Senator CHAMBERLAIN. I did not exactly understand that proposi

tion.

Mг. THOм. I say that if this commission should recommend a system by which either through means of incorporation under an act of Congress, or by filing with the Interstate Comerce Commission an acceptance of the act, then all companies so accepting the act would be prevented from making a constitutional objection.

Senator CHAMBERLAIN. I see; suggesting an election on the part of the companies.

Mr. THOм. If this is done, I would not extend this right of election to the employee, and for the reason that in the first place it would get rid of none of the evils, and in the second place if extended to the employee it must be extended to him as an individual, and an extraordinary condition might arise where some employees would accept the act and others would not, and there would be the utmost confusion because the system would not be universal in respect to any one company and all of its employees.

Mr. Moon. I suppose, Mr. Thom, the acceptance by the great interstate carriers of this country of a Federal charter would almost be unthinkable, would it not?

Mr. THOм. I would like to see it, but I am afraid it would not be accepted, because it would involve such a fundamental change of organization and of rights.

Mr. LOWELL. It seems to me it would be insuperable.

Mг. THOм. From State to Federal conditions as charter rights the situation would be so fraught with uncertainties and dangers that I do not believe that it would be practicable or a proper remedy.

Mr. JUDSON. Referring to what you have said, Mr. Thom, as to employees not having any election, do you mean that they would be bound by the election of the company that employed them?

Mr. THOм. That is what I mean. I am not recommending any election. I am recommending to this commission a compulsory and an exclusive act. I say I am bringing the other matter to the atten

30198° S. Doc. 338, 62-2, vol 2—15

tion of the commission simply because it was the result of a resolution of counsel.

This finishes my discussion of the fifth amendment. I now ask the attention of the commission briefly to the seventh amendment.

The CHAIRMAN. Before you come to that, Mr. Thom, I want to ask you a question about something you said a little while ago. I understood you to say that wherever Congress or the legislature had the power to bring about a given result by imposing a duty upon a person, as for example, to compel, or to make it the duty of railroad companies to provide safety appliances, the object of which would be to prevent accidents, that wherever it has the power to do that it would have the right to hold by its legislation the person liable if the result itself happened without imposing the duty.

Mr. THOм. Yes, sir.

The CHAIRMAN. In other words, the legislature, having the power to provide that certain safeguards shall be created about machinery, and certain other precautions taken to prevent accidents, instead of going to the trouble of doing that, could simply say that if any accident happens at all you shall be liable.

Mr. THOм. And leave the party upon whom the liability is imposed to find a way of avoiding it.

The CHAIRMAN. I thought I had not misapprehended you. Mr. THOм. I say that is the definite result of the authorities. Mr. Moon. You read an opinion of the Supreme Court which propounded that question in such a way; it simply implied that they would so decide it in that manner.

Mr. THOм. Not only that, but they have done it in the passenger

case.

The CHAIRMAN. While the language of the Supreme Court was in the interrogative form, it was really intended to be an assertion.

Mr. THOм. It was a holding; it was just simply a conclusion stated interrogatively, just a simple use of words in that way.

Mr. WARFIELD. I understand in that Zernecke case that there was a provision in the constitution of Nebraska at the time it was enacted which made it the duty of the carrier to be the insurer of his passengers and that this corporation took its incorporation subject to that in the constitution.

Mr. THOM. I called atention to that fact in my argument and showed that the Supreme Court of the United States said that it was not necessary to consider the other question, but went on and considered it in extenso.

Mr. Moon. But, Mr. Warfield, would not you suppose that if the State of Nebraska required as a prerequisite to obtaining a charter that that follows? It seems to me that you can not acquire legislative power through procedure.

Mr. WARFIELD. I do not so understand it.

The CHAIRMAN. The decision of the supreme court of Nebraska proceeded upon broader ground, and was not based on the provision you call attention to, and the Supreme Court of the United States approved the Nebraska decision.

Mr. CARY. In other words, the proposition is that you can not compel an individual to surrender a constitutional right for the purpose of exercising a privilege that it would be entitled to.

Mr. THOм. Inasmuch as there seems to be some misconception as to what the Supreme Court said, I will just ask for the moment the privilege of reading from that Zernecke case:

Regarded as extending the rule of liability for injury to persons which the common law makes for the loss of or injury to things, the statute seems defensible. And it was upon this ground that the supreme court of the State defended and vindicated the statute. The court said:

"The legislation is justifiable under the police power of the State, so it has been held. It was enacted to make railroad companies insurers of the safe transportation of their passengers as they were of baggage and freight; and no good reason is suggested why a railroad company should be released from liability for injuries received by a passenger while being transported over its line, while the corporation must respond for any damages to his baggage or freight."

The CHAIRMAN. That is my recollection.

Mr. THOм. And that same statute was the very one under consideration by the circuit court of appeals in the case I read to the commission of Russell v. Clark. It is quoted here in full in my brief, and there it is put absolutely on the ground that the Supreme Court quotes approvingly in the Zernecke case.

SEVENTH AMENDMENT.

It is also objected, Mr. Chairman and gentlemen, that an obstacle in the way of this legislation is the seventh amendment. That amendment, so far as it is pertinent, is as follows:

In suits at common law, where the value in the controversy shall exceed twenty dollars, the right of trial by jury shall be preserved.

The contention adverse to a law prescribing a fixed compensation for each person injured seems to be that there is a constitutional right to have a jury pass not only upon the fact of liability but also upon the amount of liability.

I suppose, however, that if the proposition with which I started this argument is sound, namely, that it is within the constitutional power of Congress to take away the present right of action for an injury inflicted in the future, and to substitute in its place another right, limited in such a way as Congress may determine-limited, in other words, to a specific amount-then, when a question is presented to a court for determination, the situation will be as was so well described by Mr. Cary yesterday. There will be a suit for a specific amount; there will be an allegation that the plaintiff stands in the relation to the defendant of employee and employer; that the injury was received while engaged in interstate commerce in the course of employment; that the injury consisted of such and such a thing, such as the loss of a leg or an arm, and other allegations essential to bring the cause of action within the statute. There would be no allegation of the amount of the damage; there would be no allegation of fault, but the cause of action would be sustained by proving the other pertinent allegations.

The CHAIRMAN. It would seem to be a case where the damages would be liquidated by the statute.

Mr. THOM. Exactly; and the right of trial by jury will be preserved when they are allowed to pass on these material allegations. How does that differ, may it please you, Mr. Chairman and gentle