1 2 6 7 8 (Page 5) tion hereunder in good faith shall exempt the applicant from any obligation, duty, or liability imposed in this part upon 3 the applicant as a subsidiary until the Commission has acted upon such application. The Commission may require the 5 applicant to furnish such information as the Commission deems necessary for acting upon the application. Within a reasonable time after the receipt of an application hereunder, the Commission shall enter an order granting, or, after notice 9 and opportunity for hearing, denying or otherwise disposing 10 of, such application. The Commission shall issue an order to show cause why any order declaring a company not to be a 12 subsidiary should not be revoked, whenever it has reason to 13 believe that such company has become a subsidiary, and, 14 within a reasonable time thereafter, and after notice and 15 opportunity for hearing, shall revoke the order declaring 16 such company not to be a subsidiary if it finds that such 17 company has become a subsidiary. 18 11 "(h) The term 'control' as used in this paragraph (3) 19 shall be construed, specifically but not exclusively, to include 20 the power to exercise, directly or indirectly, control or any 21 substantial influence over policies or actions.' 22 SEC. 2. Section 5 of the Interstate Commerce Act, as 23 amended, is hereby amended by omitting paragraph (18), 24 and renumbering paragraphs (19), (20), and (21) (Page 6) as 1 paragraphs (18), (19), and (20), respectively, and by 2 changing paragraph (17) to read as follows: 3 4 5 6 "(17) As used in paragraphs (4) to (16), inclusive, the term 'carrier' means a carrier by railroad subject to this part." SEC. 3. Section 12 of the Interstate Commerce Act, as 7 amended, is hereby amended by striking out everything in 8 paragraph (1) to and including the first semicolon, and by 9 striking out the next two words and inserting in lieu thereof 10 "The". 11 SEC. 4. Paragraph (1) of section 20 of the Interstate 12 Commerce Act, as amended, is hereby amended to read as follows: 13 14 15 16 "(1) That the Commission is hereby authorized to require annual reports from all common carriers subject to the provisions of this part, from all subsidiaries of such carriers, 17 and from the owners of all railroads engaged in interstate 18 commerce as defined in this part, to prescribe the manner in 19 which such reports shall be made, and to require from such 20 carriers, subsidiaries, and owners specific and full, true and correct answers to all questions upon which the Commission 22 may need information. Such annual reports shall show in 23 detail the amount of capital stock issued, the amounts paid 24 therefor, and the manner of payment for the same; the divi 21 (Page 7) 1 2 3 6 7 10 11 12 dends paid, the surplus fund, if any, and the number of stockholders; the funded and floating debts and the interest paid thereon; the cost and value of the property, franchises, and 4 equipments of the carrier, subsidiary, or owner; the num5 ber of employees and the salaries paid each class; the accidents to passengers, employees, and other persons, and the causes thereof; the amounts expended for improvements each 8 year, how expended, and the character of such improve9 ments; the earnings and receipts from each branch of business and from all sources; the operating and other expenses; the balances of profit and loss; and a complete exhibit of the financial operations of the carrier, subsidiary, or owner, 13 each year, including an annual balance sheet. Such reports 14 shall also contain such information in relation to rates or 15 regulations concerning fares or freights, or agreements, ar16 rangements, or contracts affecting the same as the Commis17 sion may require; and the Commission may in its discretion, 18 for the purpose of enabling it the better to carry out the 19 purposes of this part, prescribe a period of time within which 20 all common carriers subject to the provisions of this part, subsidiaries of such carriers, and owners of railroads engaged in interstate commerce shall have, as near as may be, a uniform system of accounts, and the manner in which such 24 accounts shall be kept." 21 22 23 1 (Page 8) SEC. 5. Paragraph (2) of section 20 of the Interstate 2 Commerce Act, as amended, is hereby amended to read as 3 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 8 that period for the year ending June 30, and shall be made 9 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 subsidiaries, or owners, or any of them, to file monthly 25 reports of earnings and expenses, and to file periodical or 2 (Page 9) 1 special, or both periodical and special, reports concerning any matters about which the Commission is authorized or 3 required by this or any other law to inquire or to keep itself 4 informed or which it is required to enforce; and such 5 periodical or special reports shall be under oath whenever the Commission so requires; and if any such carrier, sub7 sidiary, or owner shall fail to make and file any such 8 periodical or special report within the time fixed by the 9 Commission, it shall be subject to the forfeitures last above 10 provided." 6 11 12 13 14 15 16 17 SEC. 6. Paragraphs (5) of section 20 of the Interstate Commerce Act, as amended, is hereby amended to read as follows: "(5) (a) The Commission may, in its discretion, prescribe the forms of any and all accounts, records, and memoranda to be kept by carriers subject to the provisions of this part, and by subsidiaries of such carriers, including 18 the accounts, records, and memoranda of the movement of 19 traffic, as well as of the receipts and expenditures of moneys. 20 The Commission shall, as soon as practicable, prescribe, for carriers subject to this part, the classes of property for which 22 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, 25 classifying the carriers as it may deem proper for this 21 23 24 1 2 3 6 7 (Page 10) purpose. The Commission may, when it deems necessary, modify the classes and percentages so prescribed. The carriers subject to this part shall not charge to operating 4 expenses any depreciation charges on classes of property 5 other than those prescribed by the Commission, or charge with respect to any class of property a percentage of depreciation other than that prescribed therefor by the Commission. 8 No such carrier shall in any case include in any form under 9 its operating or other expenses any depreciation or other 10 charge or expenditure included elsewhere as a depreciation 11 charge or otherwise under its operating or other expenses. 12 "(b) The Commission shall have authority to inquire 13 into the management of the business of all carriers and 14 subsidiaries, and of all controlling persons and affiliates to 15 the extent that the business of such controlling persons and 16 affiliates is related to the control or management of the 17 business of one or more carriers or subsidiaries, and the 18 Commission shall keep itself informed as to the manner 19 and method in which the same is conducted, and shall 20 have the right to obtain from such carriers, subsidiaries, 21 controlling persons, and affiliates such information as the 22 Commission deems necessary to carry out the provisions of 23 this part. 24 "(c) The Commission, or any authorized agent thereof, 25 shall at all times have authority to inspect and copy all 1 2 (Page 11) accounts, books, records, memoranda, correspondence, and other documents, now or hereafter existing, of a carrier or 3 subsidiary, and such accounts, books, records, memoranda, 4 correspondence, and other documents, now or hereafter 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. 5 6 7 8 9 10 "(d) The Commission, or any authorized agent thereof, shall at all times have authority to inspect and copy such 11 accounts, books, records, memoranda, correspondence, and 12 other documents, now or hereafter existing, of any bank, 13 trust company, trustee under any indenture, brokerage firm, 14 investment banking firm, accounting firm, railway associa15 tion, or person which sells or has sold equipment or supplies 16 to carriers, as the Commission deems relevant to transactions 17 or relations between such bank, firm, association, or person, 18 and one or more carriers or subsidiaries. 19 20 "(e) It shall be unlawful for carriers subject to this part, or subsidiaries of such carriers, to keep any other accounts, 21 books, records, memoranda, and other documents, than those 22 prescribed or approved by the Commission. This provision shall apply to receivers and trustees of carriers or subsidiaries." SEC. 7. Paragraph (6) of section 20 of the Interstate 23 24 2 3 6 10 (Page 12) Commerce Act, as amended, is hereby amended to read as follows: "(6) In case of failure or refusal on the part of any 4 such carrier, subsidiary, receiver, or trustee to keep such 5 accounts, records, and memoranda on the books and in the manner prescribed by the Commission, or in case of failure 7 or refusal on the part of any carrier, receiver, trustee, sub8 sidiary, controlling person, affiliate, or other person to submit 9 any accounts, books, records, memoranda, correspondence, or other documents to the Commission or any of its author11 ized agents or examiners for inspection or copying, as re12 quired by this section, such carrier, receiver, trustee, sub13 sidiary, controlling person, affiliate, or other person shall 14 forfeit to the United States the sum of $500 for each such 15 offense and for each and every day of the continuance of 16 such offense, such forfeitures to be recoverable in the same 17 manner as other forfeitures provided for in this part." 18 SEC. 8. Paragraph (7) of section 20 of the Interstate 19 Commerce Act, as amended, is hereby amended to read as 20 follows: 21 "(7) Any person who shall willfully make, cause to be 22 made, or participate in the making of, any false entry in any 23 annual or other report required to be filed, or in the accounts 24 of any book of accounts or in any record or memoranda 25 kept by a carrier or a subsidiary thereof, or who shall will 2 3 4 5 6 8 (Page 13) 1 fully destroy, mutilate, alter, or by any other means or device falsify the record of any such account, record, or memoranda, or any books, correspondence, or other documents, or who shall willfully neglect or fail to make full, true, and correct entries in such accounts, records, or memoranda of all facts and transactions appertaining to the business of the 7 carrier or subsidiary, or shall keep any other accounts, records, or memoranda than those prescribed or approved 9 by the Commission, or shall knowingly or willfully file with 10 the Commission any false report or other document required 11 to be filed by it, shall be deemed guilty of a misde12 meanor, and shall be subject, upon conviction in any court 13 of the United States of competent jurisdiction, to a fine of 14 not less than $1,000 nor more than $5,000 or imprison15 ment for a term not less than one year nor more 16 than three years, or both such fine and imprisonment: 17 Provided, That the Commission may, in its discretion, 18 issue orders specifying such operating, accounting, or 19 financial papers, records, books, blanks, tickets, stubs, 20 correspondence, or documents of carriers and subsidiaries as 21 may, after a reasonable time, be destroyed, and prescribing 22 the length of time such books, papers, correspondence, or 23 documents shall be preserved. As used in this part, the 24 word 'keep' shall be construed to mean make, prepare, or 25 compile, as well as retain." 1 2 (Page 14) SEC. 9. Section 20a of the Interstate Commerce Act, as amended, is hereby amended by adding at the end a 3 new paragraph, which shall take effect sixty days after the 4 approval of this Act, reading as follows: 5 6 7 (13) The provisions of this section shall apply to subsidiaries." SEC. 10. The Interstate Commerce Act, as amended, 8 is hereby amended by adding, after section 20a, a new 9 section, which shall take effect sixty days after the approval 10 of this Act, reading as follows: 11 "SEC. 20b. (1) It shall be unlawful, except with the 12 prior approval of the Commission under paragraph (2) 13 of this section, for any carrier or subsidiary (or for any 14 carrier and one or more subsidiaries which are controlled, 15 directly or indirectly, by such carrier), directly or indi16 rectly, by any method or device whatsoever 17 18 19 20 21 22 23 24 25 "(i) to expend or effect the expenditure of any funds, transfer or effect the transfer of anything of value, or make, cause to be made, or guarantee any loan, (whether or not in connection with any obligation, coǹtract, or agreement), to an aggregate amount in excess of $50,000 of money or value in any one year; or "(ii) to incur any obligation or enter into any contract or agreement (other than an obligation which is, or a contract or agreement which is, and all terms and |
