justice of the appellate division of New York, Judge Jenks, and judges also of the supreme bench now, and the heads of great commercial organizations taking part in it in order to propagate the idea of men settling their disputes by friendly arbitration.

Now, one of the primary causes that led up to the idea that there should be aid given-and here I answer a question that has been previously put that there were pending on January 1, 1921, upon the Supreme Court calendar 21,380 cases untried. And I may add that in 1923 there are 23,000 cases pending and untried. And the courts are only able, as shown by the official records, to dispose of 8,000 cases, in round numbers, by all possible means. That is to say, by trial, discontinuance, and settlement, and every other way only 8,000 cases disappear from that calendar annually. So that you gentlemen can see that in the present state the courts are over three years behind. Nor can this well be remedied, at least in New York State, by the election of a large number of justices to aid in clearing up this congestion, because by a constitutional provision there may be only one justice of the supreme court elected to every 80,000 of the population.

Now, it would be interesting, perhaps, as showing the way in which the public at large, as represented by the trades, use arbitration. that on the day the society was launched, with its board of governors and with its officers organized, and when it held its first meeting on that day, as I show you [exhbiting_reproduction of newspaper articles] there appeared in the New York papers, which we have gathered together here, all these editorials and news articles commendatory of the general idea of arbitration and how much the public favored it and how much they wanted it and how much good it could do if properly administered. And I may add that since that time there have been some 350 articles appeared, which we have gathered, in newspapers and magazines throughout the United States, all favoring the general idea of arbitration.

I may say that in the New York society alone almost 1,000 of the leading merchants and citizens of New York have come in as voluntary members to support this society and to aid in its work. I may supplement that by saying that the New Jersey statute followed and improved to a certain extent upon the New York statute in regard to having arbitration supplement the courts.

Arbitration, I may say to you gentlemen, does not by any means seek to supplant the courts or work in opposition to the courts, because after all it is a purely voluntary thing. It is only the idea that arbitration may now have the aid of the court to enforce these provisions which men voluntarily enter into.

As showing how far the idea is favored by the courts, I may add that at a dinner given at the home of Mrs. Vincent Astor there were 64 of our judges attending, representing the municipal courts, the county courts, the surrogate's courts, and the supreme courts, and the project was unanimously indorsed. And at a meeting held at which there were some 250 merchants also participating it was again unanimously indorsed by that other gathering. So that there is no question but the crying demand and the need of the hour is what? It is to simplify legal matters. They have become too burdensome in many respects. People are dissatisfied with the courts. I mean no disrespect to the courts, because what I may say has been very

much more forcibly expressed by Chief Justice Taft, who expressed much more vigorously the same sentiment.

There is this advantage that appeals to the ordinary man: First of all, as Mr. Cohen pointed out, he leaves it to a man who is familiar with the subject of the controversy; he leaves it to a man who is the choice of the disputants who can hear it immediately and free from technicality. Let each man have his say unembarrassed by technicalities, so that the full truth may come out and so that no time will be lost in educating a man in the jury who is unfamiliar with the subject, and that on what may be doubtful testimony, that of the experts. So it is small wonder that arbitration is desired.

And I may say this to you, gentlemen: After our society was organized, and under the difficulties which still persist and hamper it-and which I shall point out in a moment or two, the weaknesses of it-notwithstanding that, the first six months having been devoted to missionary work, making the society known, and the statute known, that men may enter into arbitration by voluntary selection, a fact of which the community is ignorant-after those six months, in the next six months no less than 500 cases have been submitted to arbitration, and satisfactorily disposed of, and summarily disposed of, that is to say, with the least degree of delay. After you say that, it becomes apparent at once that arbitration has some tremendous advantages in this respect: Here we may select judges satisfactory to the parties. We have a list of some 3,000 bankers, merchants, architects, and men drawn from all walks of life who are only too happy to serve as arbitrators. Many of them work for nothing, for the mere honor of the position. There is sometimes a small charge, if the matter is complicated and takes too much time.

And I want to point this out, that it does not do away with the function of the lawyer. The lawyer is as necessary in arbitration as in a lawsuit. He may gather the facts, he may assist in the preparation of the case, and he may sit as an arbitrator. Indeed, I never knew of an arbitration where questions of law were not to be passed upon, and where some retired jurist, or a lawyer could not sit and pass on them.

So that you see you can have here a system of arbitration which is one that the people want; the public want it. They want speedy justice, and they want plain justice, in as simple terms as it can be reduced to.

Now, let me say this, however: We have a weakness in our system of arbitration. We need, and we must have the cooperation of the Federal courts. We must have the cooperation of the Federal statute, because while the dispute is a domestic one, we can well dispose of it. But when a merchant in New York sells his merchandise to some one in a foreign jurisdiction, his arbitration law is defeated, not so much by the fact that the thing is not specific enough, but by the course of events; by the logic of the situation. He can not get jurisdiction in a foreign State, and if he does get jurisdiction, the law of that foreign State may be different from the law here and may not be recognized as we have it here. It may be impossible to reduce it to a judgment in that State. He may not have the power to summon witnesses there. In short, he needs the aid of the Federal law in such cases, where interstate commerce is

affected, and where commerce with foreign nations is involved, or the subjects of foreign nations.

So you see how it may be possible, gentlemen, for you to aid in this important work, and I am sure I could not here and now any more heartily indorse the work of our society and those affiliated with it than I do at the present time.

Now, there is this also to be said: There is one excellent result to be achieved in the enactment of this bill, apart from the enactment itself; it will set a standard throughout the United States. There are many States which have no arbitration law. We have one in New York and one in New Jersey. So far as I know, I think there is now pending in some Western States a bill to have an arbitration statute substantially the same as in New York. The other States have no statutes whatever. In the others there is commonlaw arbitration. There is a good deal of confusion in the law on this subject. The difference between common law and statutory arbitration is largely unknown. The legal profession themselves are largely ignorant of the subject of arbitration and its benefits, because it has fallen so largely into disuse. And the enactment of this law, extending its effect all over the United States, will have an effect upon the cause of that much-desired thing-uniform legislation on a subject of this character. I have no doubt all of the States would pattern after it. There is nothing to be lost by this and there is everything to be gained.

I wish to say, just in closing, this one word: That I know I need hardly add to what has been said before as to the ethical importance of arbitration in avoiding bitterness. All that has been dwelt upon here and will undoubtedly be dwelt upon hereafter.

I want to thank the committee for their courtesy.

The CHAIRMAN. We are very much obliged to you for your statement. Who is next?

Mr. BERNHEIMER. I want to call on Mr. Henry Morse, of the Massachusetts State Chamber of Commerce.

STATEMENT OF MR. HENRY MORSE, REPRESENTING THE MASSACHUSETTS STATE CHAMBER OF COMMERCE.

Mr. MORSE. Mr. Chairman, I am a member of the Massachusetts State Chamber of Commerce, and am a director. My residence at the present time is in Washington. I have given this bill careful consideration, and the Massachusetts Chamber of Commerce has given it careful consideration, and its executive committee has indorsed it. Mr. BERNHEIMFR. Mr. Chairman, I introduce Mr. Eaton, of the American Fruit Growers.

STATEMENT OF MR. HENRY L. EATON, WASHINGTON, D. C.

Mr. EATON. Mr. Chairman. I appear for the American Fruit Growers (Inc.), of Pittsburgh, Pa. This company is a producer and shipper of vegetables and fruits in a large way; engaged in interstate commerce in almost every State in the Union.

I have nothing to say except I am instructed by the officers of the association to appear and say that they are heartily in favor of the

passage of this bill, because they believe it to be of benefit not only in their own business but to the whole country.

The CHAIRMAN. As a practical question, do you make many agreements in which there is an agreement to arbitrate?

Mr. EATON. I think that outside of the States of New York and New Jersey it is a rare thing. In the State of Pennsylvania there is an old arbitration law which has been the law for a good many years, but I suspect it has largely fallen into disuse. It did not amount to much when it was in use. Now and then some one would take up something on appeal from a justice of the peace and then arbitrate it. It saved some litigation without a doubt.

The CHAIRMAN. I would like to ask Mr. Cohen this question: Do you think, Mr. Cohen, that the fact that there is this law-if it becomes a law-that that very fact would tend to prevent men from entering into agreements to arbitrate?

Mr. COHEN. Not at all, because this is the experience: Mr. Bernheimer is more expert on that than I am. The trade organizations to-day who are represented here by these various gentlemen have a tremendous interest and influence in establishing trade customs. That is nothing new in the economic history of the world. And one of the trade customs that has been established, one of the rules of the trade is that if you belong to a trade you shall arbitrate your differ-. ences with them. The effect is that if you are a member you arbitrate your differences, and if you are outside you are not bound by it. Now, a trade custom may be established, and it may establish a custom in the trade, and one is that they will arbitrate. The silk association has it; the fruit association has it, and the lumber association has it. Now, all that we get through this law is not that we increase the customs, but the custom has a legal force to it. It is enforceable against the refractory man who will not aid the custom of the trade. So it will really encourage him instead of discouraging him. It will mean this, however, Mr. Chairman, in the drafting of partnership articles or in the drawing of great contracts like the public service commission contract for the building of the subway the arbitration agreement will be more carefully drawn by the lawyers for the parties.

If I may take a moment further, I can give you a concrete illustration fresh from my practice. One of the leading members of the bar in New York, and now one of the justices of the supreme court, represented a banking concern, and I represented the other concern in a matter in which there was a large sum of money involved, and two men who were interested in the concern could not get along together. The business had to be wound up, and my lawyer friend and myself got together and drew up a four-page document, and saved whatever there was to the parties without any court expenses at all. And then having some experience in that sort of thing we realized that we could not cover everything in that document, and we put in a clause that in case of any other difficulties, if any difficulties should arise between them, they should select these two lawyers as arbitrators, and if they could not agree the third man should be chosen. The ink was hardly dry on that agreement before five questions arose which required arbitration, and we are now settling those five ques

tions.

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Mr. BERNHEIMER. I will introduce Mr. Carnahan, of the New Jersey Lumbermen's Association, who has just come in to bring the word of his association.

STATEMENT OF MR. FRANK CARNAHAN, MANAGER OF THE NATIONAL RETAIL LUMBER DEALERS' ASSOCIATION, WASHINGTON, D. C.

Mr. CARNAHAN. Mr. Chairman, my name is Frank Carnahan; I am manager of the National Retail Lumber Dealers' Association; and I also speak for the New Jersey Lumber Dealers' Association, with headquarters in Washington.

I can not think of anything that would be of more benefit to commerce than this proposed legislation, and our associations heartily indorse it.

Mr. BERNHEIMER. Mr. Chairman, I will introduce Mr. Wilson J. Vance, of the New Jersey State Chamber of Commerce.

STATEMENT OF MR. WILSON J. VANCE, SECRETARY NEW JERSEY STATE CHAMBER OF COMMERCE, 20 CLINTON STREET, NEWARK, N. J.

Mr. VANCE. Mr. Chairman and gentleman, I wish to leave some documents for the committee, that some of the members of the committee may desire to look over at their leisure. I need not describe them. What I shall say will be very brief.

First, I want to say that Congressman Lehlbach, of New Jersey, appeared at this hearing, but found it impossible to remain, as he was called away before he was able to speak to your body. He desired me to say that he was heartily in favor of this measure, and that he would take occasion to evince his approval of it on the flocr of the House when it comes up there.

Our legislature, at its last session, passed a bill which we modestly believe is a model, having had the assistance of New York lawyers, and other lawyers in its preparation. That was the culmination of thee years of effort. When the question started in New Jersey it met, outside of the few who were informed, with opposition, to which Mr. Cohen alluded. And it took an elaborate system of education to convince even the business men that it was good for them. Now I think New Jersey is solidly for it. Almost every organization in the State, and every trade organization has erected a tribunal for the hearing of arbitration cases, and the trade organizations have begun to write arbitration clauses into their constitution so that their members are bound by them.

The reasons for indorsing a Federal measure have been well put forward here, and I need not dwell upon them at length. But we are so enthusiastically in favor of it that we feel that we can ask in a modest way the Congress to extend this principle to the Federal jurisdiction. We believe that arbitration is a thing for honest men. We have seen some of its workings in New Jersey; not a great deal so far, but we have noticed already a diminution in the ordinary character of business litigation that has come to the courts at the fall term. Our bill went into effect only on the 4th of July. We have reports from local bodies throughout the State to the effect.