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by the Government for an extension of time within which to file its claims, because, of course, the Government must assume responsibility for the action of its agents just as any other shipper must do.
Ordinarily, we do not see any reason why the Government should not be held to the same standards, at least in its commercial transactions, which private industrial organizations must meet.
Senator MYERS. Why do you limit, Mr. Fort, the transactions to "commercial transactions?"
Mr. FORT. Just because that is the only thing involved now, Senator. Senator MYERS. Are there any transactions other than commercial transactions?
Mr. FORT. I believe there are times when distinctions are attempted between governmental functions, on the other hand, pure governmental functions, and others that partake more of a commercial nature, although engaged in by the Government.
Senator MYERS. But all of the shipments to which you are directing your attention are commercial transactions?
Mr. FORT. Yes, sir.
Senator HAWKES. I understand you in using the word "commercial" there that you are not discriminating between different types of shipments at all.
Mr. FORT. No, sir. I meant shipments which the Government makes over common carriers and which are in every respect like shipments that commercial organizations make by common carriers.
Frankly, we did not find the presentation of the witnesses for the General Accounting Office very impressive or convincing. Nevertheless, we have no disposition to crowd the Government in the filing of its overcharge claims, and if your committee takes a different view of the testimony of the Government witnesses from that which I have expressed and believes that the Government, because of the special conditions which are said to exist, should have somewhat more time than other shippers, the committee could of course very readily make a special provision by way of amendment to the bills, which would lift the Government out of the 2-year provision and grant it 3 years for overcharge claims.
I say I see no necessity for that, but if the committee takes a different view it can readily follow that course.
Senator REED. Probably you have not any information on this point, but the thing that occurred to me as perhaps having the most weight in the statement of the General Accounting Office was statutory direction to disbursing officers, and then the length of time it is required to move from the disbursing officers through the General Accounting Office. I asked them yesterday to file a statement with the committee covering all of those points. That was the thing that occurred to me-a practice that has grown up in the payment of transportation charges. There is no statute specifically directing it, but a policy has grown up of the disbursing officer paying the transportation charges without regard to whether they conform to the tariffs or not. Then, later, we apparently have required that all of these things be audited by the General Accounting Office.
I do not undertake to say what is the length of time that is required to do that. Until this matter came up, until the General Accounting Office wrote quite a long letter first to Senator White and a memo
randum to me as chairman of this subcommittee, I was not familiar with, and had no knowledge of, such a situation. It is a situation, however, on which the committee certainly wants more light.
Senator HAWKES. Might I say right there, Mr. Chairman, you remember I asked a question yesterday. I asked how long did they want-10 years, 20 years, 30 years, or what? I have run a business for the last 35 years before I came into the Senate, and if anybody had the power to build up claims that had no limitation as to when their claims could be exercised or prosecuted, I would not know whether I was solvent or insolvent at any time in my life.
Mr. FORT. That is the great difficulty, Senator.
Senator HAWKES. Surely that is a great difficulty.
Mr. FORT. I have quite a bit more to say about that. Mr. Chairman, as to your suggestion, you have in mind, of course, that a private shipper must pay his freight bill at once and in no event can he have an extension of credit of over 96 hours. So to a large extent it must be said that he pays his freight bill also without audit.
Nevertheless, he is held to this 2-year period, and it is quite satisfactory to the private shipper, as Mr. Lacey said. I can't imagine, although I don't pretend to know all the ins and outs of Government accounting, why 2 years would not be long enough even for the most elaborate procedure, but if it would not be, then the committee of course could make a slight extension.
One of the witnesses for the General Accounting Office said that it took about 7 months, as I remember it, before they could get under way with respect to a claim, and those 7 months included the 3 months, I believe, that were supposed to be consumed on the average before the bill is received. Those 3 months seem to reflect a considerable overestimate. However that may be, just why the time between 7 months and the end of 2 years would not be sufficient, I don't know. If it is necessary to go back to get additional information because the Government agency that billed the shipment did not bill it correctly, I don't believe that fact would give any basis for more time.
You know, all a claimant has to do is file an informal statement with the Commission of his claim in order to stop the running of the statute under the provisions of the statute.
Senator HAWKES. Will you explain that to me? If you file an intention to make a claim, you say that stops the running of the statute? Mr. FORT. Yes, sir; I will read the statute on that point.
Senator HAWKES. How long can that exist without actually getting into suit, if you cannot get settlement?
Mr. FORT. Let me read that to you.
Senator HAWKES. I think that is very important. If that is so, it satisfies my mind.
Mr. FORT. I will read this to you, Senator Hawkes. This is section 16, paragraph 2, subparagraph (c), provisions with respect to limitation:
For recovery of overcharges action at law shall be begun or complaint filed with the Commission against carriers subject to this part within two years from the time the cause of action accrues, and not after, subject to subdivision (d), except that if claim for the overcharge has been presented in writing to the carrier within the two-year period of limitation said period shall be extended to include six months from the time notice in writing is given by the carrier to the claimant of disallowance of the claim, or any part or parts thereof, specified in the notice.
So in the first place, you stop the running of the statute merely by filing a claim with the carrier. You don't have to start suit in court. That stops the statute until 6 months after the carrier has disallowed the claim.
You see, the period is much longer than 2 years.
Senator HAWKES. What happens after the 6 months expires? Do you still have left the part of the statute of limitations that has not expired when you filed notice of the claim?
Mr. FORT. Oh, yes; and you would have all of the 6 months even if it ran beyond your 2 years.
Senator HAWKES. Yes; I understand that, but what I meant is this: Let us say you filed a notice of a claim 6 months after the statute of limitations had started to run, and that would leave you under the 2-year statute of limitations 18 months plus the 6 months. Is that right?
Mr. FORT. You say 6 months after the cause of action accrues you file a claim with the railroad?
Senator HAWKES. That is right. You still have 18 months on the statute of limitations left.
Mr. FCRT. Yes, sir.
Senator HAWKES. Suppose you do not get that thing settled until the 2 years have expired, and the 6 months, where are you under the statute of limitations?
Mr. FORT. You would have your full 2 years, or if 6 months after the disallowance by the carrier gave a longer period than 2 years, you would have that.
Senator HAWKES. That is what I wanted to know.
Mr. FORT. Yes, sir.
There is another provision, also did you mean filing with the Commission or with the carrier?
Senator HAWKES. I meant filing with the Commission.
Mr. FORT. If you filed with the Commission you stop the running of the statute right then and there forever.
Senator HAWKES. That is what I wanted to find out. Then if a man thinks he has a claim and he uses his rights, there is a method of stopping the statute of limitations, is that not right?
Mr. FORT. Oh, yes.
Seantor HAWKES. That is what I wanted to bring out.
Mr. FORT. There is another provision with respect to the overcharge statute which is of some interest since you are going into this detail, and that is subparagraph (d) of paragraph (2) of section 16:
If on or before expiration of the two-year period of limitation in subdivision (b) or of the two-year period of limitation in subdivision (c) a carrier subject to this part begins action under subdivision (a) for recovery of charges in respect of the same transportation service, or, without beginning action, collects charges in respect of that service, said period of limitation shall be extended to include ninety days from the time such action is begun or such charges are collected by the carrier.
I merely make the point that there are some liberalizing provisions on the present 2-year period prescribed for the recovery of overcharges, and they are to be found in section 16.
Senator HAWKES. Mr. Chairman, I would like to ask Mr. Fort this question. Maybe he is going to touch on it later, and if he is, we will let it go until he gets to it.
Yesterday, you remember, Mr. Massie, I believe it was, said why should the railroads, transportation companies, or private citizens of this country have the right to file a claim against the Government and suit against the Government for 10 years if the Government only had the right against the carrier, and so forth, for 2 or 3 years, whatever it might be?
Mr. FORT. I was going to speak to that right now. I should say a word perhaps with respect to the statement by one of the witnesses for the General Accounting Office that the carriers now have a 6-year period for bringing suit in the Court of Claims to recover freight charges against the Government.
Senator MYERS. Which class of carriers are you directing your attention to, Mr. Fort?
Mr. FORT. The railroads.
Senator MYERS. Under part I.
Mr. FORT. And the same thing would be true of any other carriers, I take it. It is true that in the Southern Pacific case, Southern Pacific v. United States (62 Ct. Cl. 391) it was held that a railroad might sue for undercharges within a 6-year period. This holding was based on the conclusion of the court that such an action was governed by the general statute of limitations applicable to suits in the Court of Claims and not by section 16 of the Interstate Commerce Act.
Thus the 6-year period which was held to apply is not a period which was fixed in the light of special conditions to be found in regulated transportation. The railroads were allowed 6 years merely because the general statute applicable in the Court of Claims provided 6 years. However, I can say that we are perfectly willing to be bound by the same period of limitation in the collection of undercharges which binds the Government in the recovery of overcharges.
In short, we are entirely willing that the bill to which you are giving attention should be so amended as to make it clear that any action by the railroads to recover overcharges in the Court of Claims or in any other tribunal should be governed by the 2-year period or the 3year period, whichever you decide upon, which shall also govern suits by the Government to recover overcharges.
It is true now, Senator Hawkes, that the period is 6 years in the Court of Claims, although it would not be 6 years in any other tribunal. That is due to the special statute in the Court of Claims.
The 10-year period that was mentioned, as I understand-
Senator HAWKES. The probabilities are that the reason the Interstate Commerce Commission for 25 years or more had apparently adopted the rule that the Government was just the same as any other shipper was based on the theory that the Government was bound under the Interstate Commerce Act; was it not?
Mr. FORT. That is true; yes, sir.
Senator HAWKES. Personally, I want just to express the opinion here that it seems to me that anything that we can do to have the legislation covering the relationship of the railroads and shippers and the Government as a shipper so as to define the period in which these claims can be made pro and con within a definite period would be all to the good. It would be to the benefit of all parties concerned, because it alerts them; they must be on their toes, they must know what
they are doing, they must conduct their business in an up-to-date fashion, and it will remove from the relationship of the Government to the transportation companies, be they railroads, airplanes, motor carriers, or what not, an uncertainty which is one of the greatest menaces and hardships that businessmen, if we want to remain a freeenterprise Nation, have to put up with.
Mr. FORT. Yes, sir; I am in agreement with what you say.
Witnesses for the General Accounting Office at first appeared to take the position that the Government should be wholly relieved from the application of the limitation provisions in the bill, but later advanced the view that no period of limitation less than 6 years should apply to the Government.
The bill as drawn applies to all carriers subject to the Interstate Commerce Act and to all shippers, including the Government, without distinction. To amend the bill in such a way as wholly to relieve the Government from any limitation wiuld be to take a step entirely out of keeping with the national transportation policy and with the entire scheme of regulation. I do not think that there is any occasion to labor the point at this time. We are content on that point to rest upon the views of the Interstate Commerce Commission and the views of the chairman of the House Committee on Interstate and Foreign Commerce expressed when a similar question was raised in the House with respect to H. R. 2759.
By letter of May 29, 1947, the chairman of the House committee. requested the opinion of the Interstate Commerce Commission concerning a proposed amendment to H. R. 2759 which would have removed the United States from the application of the period of limitations provided in that bill.
The response from the Commission was in the form of a letter of June 8, 1947, addressed to the chairman of the House committee, the Honorable Charles A. Wolverton and signed by Dr. Walter M. W. Splawn, chairman of the legislative committee of the Commission. I should like very much to read from that letter.
Senator HAWKES. Mr. Fort, might I ask you, before you read that letter, who asked to have the amendment to this act which would relieve the Government from the 2- or 3-year statute of limitations? Who asked to have that put in?
Mr. FORT. On the House side?
Senator HAWKES. Yes. I don't mean what Representative, but what was the source from which that idea came?
Mr. FORT. The occasion was this, Senator: The bill came on the Consent Calendar in the House.
Senator MYERS. It was the Comptroller General, was it not, who asked for it?
Mr. FORT. The Comptroller General at one stage asked for it; yes, sir. I suppose that the real source was the Comptroller General, the General Accounting Office, asked, just as they have asked your committee. The chairman of the House committee then wrote to the Interstate Commerce Commission and perhaps to others and asked to have the views of the Commission on that point.
If I may quote now from Dr. Splawn's letter of June 6, to Mr. Wolverton:
In our opinion, such an amendment