2 3 4 5 6 7 9 11 (Page 7) 1 provisions of this part, and from the owners of all railroads engaged in interstate commerce as defined in this part, to prescribe the manner in which such reports shall be made, and to require from such carriers and owners, and from subsidiaries, specific and full, true, and correct answers to all questions upon which the Commission may need information. Such annual reports shall show in detail the amount of 8 capital stock issued, the amounts paid therefor, and the manner of payment for the same; the dividends paid; the 10 surplus fund, if any, and the number of stockholders; the funded and floating debts and the interest paid thereon; the 12 cost and value of the property, franchises, and equipments 13 of the carrier or owner; the number of employees and the 14 salaries paid each class; the accidents to passengers, em15 ployees, and other persons, and the causes thereof; the amounts expended for improvements each year, how ex17 pended, and the character of such improvements; the earn18 ings and receipts from each branch of business and from all 19 sources; the operating and other expenses; the balances of 20 profit and loss; and a complete exhibit of the financial opera21 tions of the carrier or owner, each year, including an annual 22 balance sheet. Such reports shall also contain such infor23 mation in relation to rates or regulations concerning fares or 24 freights, or agreements, arrangements, or contracts affecting 25 the same as the Commission may require; and the Commis 16 1 4 8 9 (Page 8) sion may in its discretion, for the purpose of enabling it the 2 better to carry out the purposes of this part, prescribe a 3 period of time within which all common carriers subject to the provisions of this part and owners of railroads engaged 5 in interstate commerce shall have, as near as may be, a uni6 form system of accounts, and the manner in which such 7 accounts shall be kept. The Commission is hereby authorized to require that every subsidiary which is not a carrier or an owner or a motor carrier file with the Commission an 10 annual report, which shall consist of its balance sheet as of 11 the end of the twelve-month period determined under para12 graph (2), its income account for such period, and its profit 13 and loss account as of the beginning and the end of such 14 period, and such report shall classify separately the accounts 15 shown therein representing (a) transactions between the 16 reporting subsidiary or subsidiaries and the controlling car17 rier, (b) transactions between the reporting subsidiary or 18 subsidiaries and all other subsidiaries of the controlling car19 rier, and (c) all other transactions. The Commission in its 20 discretion may permit two or more subsidiaries of the same 21 carrier to report jointly, or to file consolidated reports, and 22 shall have power to prescribe the form in which reports of 23 subsidiaries shall be made pursuant hereto." 1 2 3 8 9 (Page 9) SEC. 5. Paragraph (2) of section 20 of the Interstate Commerce Act, as amended, is hereby amended to read as follows: 4 "(2) Said detailed reports shall contain all the required 5 statistics for the period of twelve months ending on the 6 30th day of June in each year, or on the 31st day of 7 December in each year if the Commission by order substitute that period for the year ending June 30, and shall be made out under oath and filed with the Commission at its office 10 in Washington within three months after the close of the 11 year for which the report is made, unless additional time 12 be granted in any case by the Commission; and if any 13 carrier, subsidiary, person, or corporation subject to the 14 provisions of this part shall fail to make and file said annual 15 reports within the time above specified, or within the time 16 extended by the Commission, for making and filing the same, 17 or shall fail to make specific and full, true, and correct answer 18 to any questions authorized by the provisions of this section 19 within thirty days from the time it is lawfully required so 20 to do, such party shall forfeit to the United States the sum of 21 $100 for each and every day it shall continue to be in 22 default with respect thereto. The Commission shall also have 23 authority by general or special orders to require said carriers 24 or owners, or any of them, to file monthly reports of earn25 ings and expenses, and to require such carriers and owners 1 2 6 (Page 10) and subsidiaries to file periodical or special, or both periodical and special, reports concerning any matters about which 3 the Commission is authorized or required by this or any other 4 law to inquire or to keep itself informed or which it is 5 required to enforce; and such reports shall be under oath whenever the Commission so requires; and if any such 7 carrier, subsidiary, or owner shall fail to make and file any such report within the time fixed by the Commission, it shall be subject to the forfeitures last above provided.' SEC. 6. Paragraphs (5) of section 20 of the Interstate Commerce Act, as amended, is hereby amended to read as 12 follows: 8 9 10 11 13 "(5) (a) The Commission may, in its discretion, pre14 scribe the forms of any and all accounts and records to be 15 kept by carriers subject to the provisions of this part, includ16 ing the accounts and records of the movement of traffic, 17 as well as of the receipts and expenditures of moneys. 18 The Commission shall, as soon as practicable, prescribe, for 19 carriers subject to this part, the classes of property for which 20 depreciation charges shall be included under operating expenses, and the percentages of depreciation which shall be charged with respect to each of such classes of property, 23 classifying the carriers as it may deem proper for this 24 purpose. The Commission may, when it deems necessary, 25 modify the classes and percentages so prescribed. The 21 22 1 3 4 6 7 10 11 (Page 11) carriers subject to this part shall not charge to operating 2 expenses any depreciation charges on classes of property other than those prescribed by the Commission, or charge with respect to any class of property a percentage of depre5 ciation other than that prescribed therefor by the Commission. No such carrier shall in any case include in any form under its operating or other expenses any depreciation or other 8 charge or expenditure included elsewhere as a depreciation 9 charge or otherwise under its operating or other expenses. "(b) The Commission shall have authority to inquire into the management of the business of all carriers and 12 subsidiaries, and of all controlling persons and affiliates to 13 the extent that the business of such controlling persons and 14 affiliates is related to the control or management of the 15 business of one or more carriers or subsidiaries, and the Commission shall keep itself informed as to the manner and method in which the same is conducted, and shall 18 have the right to obtain from such carriers, subsidiaries, 19 controlling persons, and affiliates such information as the Commission deems necessary to carry out the provisions of this part. 16 17 20 21 22 "(c) The Commission, or any authorized agent thereof, 23 shall at all times have authority to inspect and copy all 24 accounts, books, records, memoranda, correspondence, and 25 other documents, now or hereafter existing, of a carrier or (Page 12) 1 subsidiary, and such accounts, books, records, memoranda, 2 correspondence, and other documents, now or hereafter 3 existing, of a controlling person or affiliate, as the Commission deems relevant to such controlling person's or affiliate's relation to or transactions with one or more carriers or subsidiaries. 4 5 6 7 8 11 "(d) The Commission, or any authorized agent thereof, shall at all times have authority to inspect and copy such 9 accounts, books, records, memoranda, correspondence, and 10 other documents, now or hereafter existing, of any bank, trust company, trustee under any indenture, brokerage firm, 12 investment banking firm, accounting firm, railway associa13 tion, or person which sells or has sold equipment or supplies 14 to carriers, as the Commission deems relevant to transactions 15 or relations between such bank, firm, association, or person, 16 and one or more carriers or subsidiaries. 17 "(e) It shall be unlawful for carriers subject to this part 18 to keep any accounts, books, records, memoranda, and other 19 documents, inconsistent with those prescribed or approved 20 by the Commission. This provision shall apply to receivers and trustees of carriers." "" 21 22 23 SEC. 7. Paragraph (6) of section 20 of the Interstate Commerce Act, as amended, is hereby amended to read as 24 follows: 1 2 6 7 8 9 (Page 13) "(6) In case of failure or refusal on the part of any such carrier, receiver, or trustee to keep such accounts 3 and records, on the books and in the manner prescribed 4 by the Commission, or in case of failure or refusal on the 5 part of any carrier, receiver, trustee, subsidiary, controlling person, affiliate, or other person to submit any accounts, books, records, memoranda, correspondence, or other documents to the Commission or any of its authorized agents or examiners for inspection or copying, as re10 quired by this section, such carrier, receiver, trustee, sub11 sidiary, controlling person, affiliate, or other person shall 12 forfeit to the United States the sum of $500 for each such 13 offense and for each and every day of the continuance of 14 such offense, such forfeitures to be recoverable in the same 15 manner as other forfeitures provided for in this part." 16 SEC. 8. Paragraph (7) of section 20 of the Interstate 17 Commerce Act, as amended, is hereby amended to read as 18 follows: 19 "(7) Any person who shall willfully make, cause to be 20 made, or participate in the making of, any false entry in any 21 annual or other report required to be filed, or in the accounts 22 of any book of accounts or in any record or memoranda 23 kept by a carrier or a subsidiary thereof, or who shall will24 fully destroy, mutilate, or alter such accounts, books, or 25 records, or by any means or device falsify the record of any 3 4 9 11 (Page 14) 1 such account, record, or memoranda, or any books, corre2 spondence, or other documents, or who shall willfully neglect or fail to make full, true, and correct entries in any such accounts or records, of all facts and transactions appertaining 5 to the business of the carrier or subsidiary, or shall keep any 6 accounts, records, or memoranda inconsistent with those 7 prescribed or approved by the Commission, or shall know8 ingly or willfully file with the Commission any false report or other document required to be filed by it, shall be deemed 10 guilty of a misdemeanor, and shall be subject, upon conviction in any court of the United States of competent jurisdic12 tion, to a fine of not less than $1,000 nor more than $5,000 13 or imprisonment for a term not less than one year nor more 14 than three years, or both such fine and imprisonment: 15 Provided, That the Commission may, in its discretion, 16 issue orders specifying such operating, accounting, or 17 financial papers, records, books, blanks, tickets, stubs, 18 correspondence, or documents of carriers and subsidiaries as may, after a reasonable time, be destroyed, and prescribing the length of time such books, papers, correspondence, or 21 documents shall be preserved. As used in this part, the 22 word 'keep' shall be construed to mean make, prepare, or 23 compile, as well as retain.' 19 20 24 25 SEC. 9. Section 20a of the Interstate Commerce Act, as amended, is hereby amended by adding at the end two (Page 15) new paragraphs, which shall take effect sixty days after the 2 approval of this Act, reading as follows: 3 5 6 7 8 9 10 66 (13) Subsidiaries of carriers (other than subsidiaries 4 which are carriers subject to this part, and other than common or contract carriers by motor vehicle, corporations organized for the purpose of engaging in transportation as such carriers, and corporations authorized by order entered under section 213 (a) (1) of part II to acquire control of any such carrier, or of two or more such carriers) shall be subject to the provisions of paragraphs (2) to (6) and (8) to (11), inclu11 sive, of this section, including penalties applicable in cases of 12 violations thereof: Provided, That such paragraphs shall not 13 apply to the issuance of securities by a wholly owned sub14 sidiary to the carrier which owns such subsidiary or to one 15 or more other wholly owned subsidiaries of such carrier, 16 but in such event it shall be unlawful for the carrier or sub17 sidiary to which such securities are issued to sell or otherwise 18 dispose of the same to any other person without the authoriz19 tion of the Commission under paragraph 2 of this section: 20 Provided further, That the Commission shall by order au21 thorize an issue or assumption by any such subsidiary under 22 paragraph (2) of this section only if it finds that such issue 23 or assumption is compatible with the public interest in trans24 portation, will not adversely affect the carrier or carriers in 25 control of such subsidiary, and will not impair the ability of 2 3 (Page 16) 1 such carrier or carriers to perform their service to the public. As used in this paragraph, the term 'wholly owned subsidiary' means a subsidiary all of whose outstanding voting securities 4 (exclusive of directors' qualifying shares) are owned by a carrier or by a company which is a wholly owned sub6 sidiary by virtue of this sentence, or by both. 5 7 "(14) After December 31, 1939, it shall be unlawful 8 for any officer or director of a carrier to hold the position 9 of officer or director of a subsidiary which is subject to 10 paragraph (13) of this section and less than 100 per centum 11 of whose stock (exclusive of directors' qualifying shares) 12 is held by such carrier or by another such subsidiary, unless 13 such holding shall have been authorized by order of the 14 Commission, upon due showing in form and manner as pre15 scribed by the Commission, that neither public nor private 16 interests will be adversely affected thereby. After this para17 graph takes effect, the second and third sentences of para18 graph (12) of this section shall apply to subsidiaries subject 19 to paragraph (13) of this section.' 20 SEC. 10. The Interstate Commerce Act, as amended, 21 is hereby amended by adding, after section 20a, a new 22 section, which shall take effect sixty days after the approval 23 of this Act, reading as follows: 24 "SEC. 20b. (1) It shall be unlawful, except with the 25 prior approval of the Commission under paragraph (2) |