76TH CONGRESS

1ST SESSION

S. 2610

IN THE SENATE OF THE UNITED STATES

JUNE 15, 1939

Mr. WHEELER (for himself and Mr. TRUMAN) introduced the following bill; which was read twice and referred to the Committee on Interstate Commerce

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A BILL

To amend the Interstate Commerce Act, and for other

purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress asssmbled, That paragraph (3) of section 1 of the Interstate Commerce 4 Act, as amended, is hereby amended by inserting "(a)” before the first word, and by adding at the end the following: "(b) The term 'person' as used in this part means an 7 individual or a company.

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8 "(c) The term 'company' as used in this part means a 9 corporation, partnership, association, joint-stock company 10 business trust, organized group of persons, whether incor,

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porated or not; or any receiver, trustee, or liquidating agent 2 of any of the foregoing in his capacity as such.

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"(d) The term 'subsidiary' as used in this part means— "(A) a company 10 per centum or more of the outstanding voting securities of which are directly or indirectly held with power to vote, owned, or controlled by one or more carriers, by one or more persons which are subsidiaries by virtue of this subparagraph (d), or by one or more such persons and one or more carriers, unless the Commission, as provided in subparagraph (g) by order determines such company not to be a subsidiary; or

"(B) a person which is controlled directly or indirectly, by stock ownership, lease, agreement, or voting trust, by common officers, directors, or stockholders, by reason of circumstances surrounding organization or operation, or by any method whatsoever, by one or more carriers, by one or more persons which are subsidiaries by virtue of this subparagraph (d), by one or more such persons and one or more carriers, or by any other person or persons having such control under any indenture, trust, or other agreement or arrangement with, or by means of the assets of, one or more such persons or carriers.

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"(e) The term 'controlling person' as used in this part

means

"(A) a person which directly or indirectly holds with power to vote, owns, or controls, 10 per centum or more of the outstanding voting securities of a carrier or of a person which is a controlling person by virtue of this subparagraph (e); or

"(B) a person which controls, directly or indirectly, alone or pursuant to an arrangement or understanding with one or more other persons, by stock ownership, lease, agreement, or voting trust, by common officers, directors, or stockholders, by reason of circumstances surrounding organization or operation, or by any method whatsoever, a carrier or a person which is a controlling person within the meaning of this subparagraph (e). "(f) The term 'affiliate' as used in section 20 of this part means

"(A) a company 10 per centum or more of the outstanding voting securities of which are directly or indirectly held with power to vote, owned, or controlled, by one or more controlling persons, by one or more persons which are affiliates by virtue of this subparagraph (f), or by one or more such persons and one or more controlling persons; or

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"(B) a person which is controlled, directly or indirectly, by stock ownership, lease, agreement, or voting trust, by common officers, directors, or stockholders, by reason of circumstances surrounding organization or operation, or by any method whatsoever, by one or more controlling persons, by one or more persons which are affiliates by virtue of this subparagraph (f), by one or more such persons and one or more controlling persons, or by any other person or persons having such control under any indenture, trust, or other agreement or arrangement with, or by means of the assets of, one or more such persons or controlling persons.

"(g) The Commission, upon application, shall by order 14 declare that a company is not a subsidiary under clause (A) 15 of subparagraph (d) if the Commission finds that the ap16 plicant is not controlled, directly or indirectly, by stock 17 ownership, lease, agreement, or voting trust, by common 18 officers, directors, or stockholders, by reason of circum19 stances surrounding organization or operation, or by any 20 method whatsoever, by one or more carriers, by one or more subsidiaries, by one or more carriers and one or 22 more subsidiaries, or by any other person or persons having 23 such control under any indenture, trust, or other agreement 24 or arrangement with, or by means of the assets of, one or more such carriers or subsidiaries. The filing of an applica

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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, 8 the Commission shall enter an order granting, or, after notice 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

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"(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)

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as

1 paragraphs (18), (19), and (20), respectively, and by 2 changing paragraph (17) to read as follows:

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"(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 "The".

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11 SEC. 4. Paragraph (1) of section 20 of the Interstate 12 Commerce Act, as amended, is hereby amended to read as 13 follows:

14 "(1) That the Commission is hereby authorized to re15 quire annual reports from all common carriers subject to the 16 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

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dends paid, the surplus fund, if any, and the number of stock2 holders; the funded and floating debts and the interest paid 3 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 acci6 dents to passengers, employees, and other persons, and the causes thereof; the amounts expended for improvements each year, how expended, and the character of such improvements; the earnings and receipts from each branch of business and from all sources; the operating and other expenses; 11 the balances of profit and loss; and a complete exhibit of 12 the financial operations of the carrier, subsidiary, or owner, 13 each year, including an annual balance sheet. Such reports

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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, 21 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 accounts shall be kept."

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SEC. 5. Paragraph (2) of section 20 of the Interstate 2 Commerce Act, as amended, is hereby amended to read as 3 follows:

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"(2) Said detailed reports shall contain all the required 5 statistics for the period of twelve months ending on the 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

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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."

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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, pre15 scribe the forms of any and all accounts, records, and 16 memoranda to be kept by carriers subject to the provisions 17 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 21 carriers subject to this part, the classes of property for which 22 depreciation charges shall be included under operating 23 expenses, and the percentages of depreciation which shall 24 be charged with respect to each of such classes of property, 25 classifying the carriers as it may deem proper for this

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1 purpose. The Commission may, when it deems necessary, 2 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 other than those prescribed by the Commission, or charge with respect to any class of property a percentage of depre7 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 10 charge or expenditure included elsewhere as a depreciation charge or otherwise under its operating or other expenses.

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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