general policies and regulatory decisions, findings and determinations of the Commission.

Now, if you actually read the language of section 17, what it is talking about is the type of regulatory decision that shall be made by a division of the Commission, an individual Commissioner, or a board of employees.

Our very considered judgment is that that responsibility is not transferred by this plan.

Mr. HOLIFIELD. That does bring up the locomotive-inspection service. There was great fear shown here by Mr. A. E. Lyons, of the Railroad Executives Association, that there would be the power to interfere with the present locomotive-inspection statutes.

Mr. STAUFFACHER. Could I say a word about that, sir?

Mr. HOLIFIELD. Yes. I am asking you the question so that we can get some information on that.

Mr. STAUFFACHER. As I understand the present situation of that, it is like this: The director of the locomotive inspection division and the two assistants are appointed by the President and confirmed by the Senate. The law provides that the Interstate Commerce Commission shall furnish them with office space and administrative activities, and so on. Now then, the law makes provision for the appointment of a staff for that, and the staff members are appointed by the Interstate Commerce Commission. The regulations under which the staff operates and in acordance with which they inspect locomotives are either regulations of the ICC or regulations of the railroads or of the locomotive inspector which have been approved by the ICC.

The law has the specific statement in it that the first duty of the inspectors is to uphold the regulations of the Interstate Commerce Commission. Further, the law provides that they report annually to the Interstate Commerce Commission. Their budget is submitted with the budget of the Interstate Commerce Commission.

So the first point I would like to make is that there is a very close connection between that organization and the Interstate Commerce Commission.

Now, the second point I would like to make is that this plan does. not do what plans 1 to 6 did, namely, transfer the functions of the locomotive inspectors to the Chairman. The functions of the locomotive inspectors remain with the locomotive inspectors just as they are today. What is transferred, however, is the direction and supervision of that service, so that the locomotive inspector as a bureau chief in the ICC hereafter would have the same relationship to the Chairman that the head of the Bureau of Motor Carriers, for example, would have under this reorganization plan. In other words, he would be a part of the staff that is subject to the supervision of the Chairman.

Mr. HOLIFIELD. The words "direction and control" were the words, of course, which Mr. Lyons questioned. What interpretation do you put upon those words that apply to the powers given the Chairman? Mr. STAUFFACHER. Well, the words "direction and control," as used in these plans, imply a very definite degree of supervisory responsibility in the Chairman.

One other thing I would like to point out, however, is that the role of the Chairman in exercising direction and supervision over the locomotive-inspection service is subject to the same qualifications of policy decisions by the Commission and regulatory findings and de

terminations by the Commission, as is the Chairman's role with respect to the rest of the staff of the ICC. So that the intent of the inclusion of that section in the plan was to make it clear that the Bureau of Locomotive Inspection was in effect an integral part of the staff of the ICC, and that it was not in effect an organization which had no place to report within the ICC.

Mr. HOLIFIELD. Then, you take the position that the Chairman could not interfere with the function of the locomotive-inspection service unless he did so at the direction of the Commission as a whole?

Mr. STAUFFACHER. If I could restate that, I would say that he could-I suppose, by inference, you mean change the way in which they are now acting-I would say that he could do that only if it accorded with the general policies of the Commission under which he was operating. Certainly, the Chairman by himself could not change the regulations under which the locomotive inspectors do their work, because those are regulations of the Commission and are absolutely unaffected by this plan.

Mr. HOLIFIELD. Could he change allocation of funds or the approval of the budget?

Mr. STAUFFACHER. No; because that provision is also reserved to the Commission by this plan.

Mr. HOFFMAN. Of course, the plan says, under (c):

The Director of Locomotive Inspection and the two assistant directors of the Locomotive Inspection shall perform their functions subject to the direction and control of the Chairman.

Mr. STAUFFACHER. Yes, sir.

Mr. HOFFMAN. Does that mean anything?

Mr. STAUFFACHER. Yes, sir.

Mr. HOFFMAN. Does it mean just exactly what it says, in your understanding?

Mr. STAUFFACHER. I was trying to point, Mr. Hoffman, to section (b). The only point I was trying to make was that the Chairman is just as restricted with reference to the performance of those functions as he is with the performance of any other functions given him by this plan, because section (b) states that in carrying out any of his functions under the provision of this section, and item (c) is within the section, the Chairman shall be governed by general policies of the Commission and by such regulatory decisions, findings, and determinations as the commission may by law be authorized to make.

Mr. HOFFMAN. Your point is that while subsection (c) places those inspectors under the Chairman, the Chairman himself is limited by section (b)?

Mr. STAUFFACHER. Yes, sir.

Mr. HOFFMAN. What is the use of (c), or why the necessity for (c), if you are going along with (b) and the Commission is to fix the rules and regulations and the law is to fix the duties of the inspectors?

Mr. STAUFFACHER. I am repeating again, sir, that the point of (c) was to make it clear that the Locomotive Inspection functions within ICC, but on a little different basis than, say, the Bureau of Motor Carriers today, were to be treated under this plan in the same way as the other functions and activities of the ICC.

Mr. HOFFMAN. You will admit that the functions of the Director of Locomotive Inspection and his assistants are to be carried out

under the regulations of the Commission and under the law as it is written?

Mr. STAUFFACHER. Absolutely, sir.

Mr. HOFFMAN. Then there is no sense, as I see it, in saying that they shall be under the Chairman. If the Chairman, in accordance with your contention, is still under (b), then that takes care of it.

Mr. STAUFFACHER. The only point was to make it clear that the Director of Locomotive Inspection would report to the Chairman in the same way that the head of the Bureau of Motor Carriers would report to the Chairman.

Mr. HOFFMAN. Who do these inspectors report to now? To the Commission?

Mr. STAUFFACHER. To the Commission.

Mr. HOFFMAN. And they are governed entirely by the statute and by the regulations made by the Commission?

Mr. STAUFFACHER. Yes, sir.

Mr. HOFFMAN. But they file their report, under this new plan, with the Chairman, you said?

Mr. STAUFFACHER. No; for administrative purposes they now report to the Commission.

Mr. HOFFMAN. You said a moment ago they reported to the Chair

man.

Mr. STAUFFACHER. They will after this plan takes effect; yes, sir. Mr. HOFFMAN. What can he do about it if his power is limited by and governed by the regulations of the Commission and the law? He cannot do anything about it.

Mr. STAUFFACHER. He can do to this only what he could do to other sections of the Interstate Commerce Commission. Our feeling was that if we left this out of the plan, it would have been vague as to what the intent was with respect to the Locomotive Inspection function.

Mr. HOLIFIELD. In other words, as I understand it-and correct me if I am wrong—this is an organizational line of responsibility which occurs because of the direction that the Director of Locomotive Inspection shall report to the Chairman, who in turn is responsible, from an executive and administrative standpoint, to bring such matters as he deems to be necessary for attention to the Commission as a whole?

Mr. STAUFFACHER. Absolutely.

Mr. HOLIFIELD. And that is the purpose of it; is it?

Mr. STAUFFACHER. That is right, sir.

Mr. HOLIFIELD. What is the change between that and the way it is at the present time? At the present time would not that same thing occur, or is the Director of Locomotive Inspection Bureau so independent of the Commission that at this time it does not have to report to the Commission, but reports directly to the President?

Mr. STAUFFACHER. I believe that at this time they report to the Commission, but the language of the various statutes which have been enacted for the last 40 years on this point is not nearly as clear on this. As I was outlining before, those five or six things that I outlined are, most of them, in succeeding statutes.

Mr. HOLIFIELD. This is a clarification, then, of present procedure? Mr. STAUFFACHER. That is my understanding of it; yes, sir.

Mr. HOLIFIELD. That is all, thank you.

Mr. LOVRE. In practice, there will be no change?

Mr. STAUFFACHER. In practice, certainly, as far as the regulations and the policies under which this inspection service operates, they will still be the regulations and policies of the ICC, as they are today. Mr. LOVRE. So that in practice it will not make any difference?

Mr. STAUFFACHER. No more difference with respect to the locomotive-inspection service than it would make to any other part of the ICC, to have the Chairman be the administrative head of the body.

Mr. DONOHUE. Before you leave that point, are the duties of the Director of Locomotive Inspection and his two assistants defined by the Interstate Commerce Act?

Mr. STAUFFACHER. There was a special act, sir, on locomotive inspection.

Mr. DONOHUE. Their duties are defined there?

Mr. STAUFFACHER. They are quite clearly defined; yes, sir.

Mr. DONOHUE. And the act that defines their duties is not a part of the Interstate Commerce Act?

Mr. STAUFFACHER. I cannot answer that specifically. I think it is, however. It is an amendment to it. It is an act of 1911, which subsequently has been amended. Certainly if it is not a part of the Interstate Commerce Act in the technical sense, it is a part of the legal basis of the Interstate Commerce Commission.

Mr. DONOHUE. Assuming that it is a separate act and this plan goes through, it is transferring certain obligations that are now the obligations of the Director of the Bureau of Locomotive Inspection to the Chairman?

Mr. STAUFFACHER. No, sir.

Mr. DONOHUE. Now, with the language that is used in subsection (c), "he shall perform his functions subject to the direction and control," the Director will not have any control himself, will he? That control is being transferred to the Chairman. Why would not the word "supervision" be more appropriate?

Mr. STAUFFACHER. "Supervision" would have been a softer word, sir.

Mr. DONOHUE. I think it is changing the substantive law with the use of this language, providing their duties and their authority are set up by a special act.

Mr. STAUFFACHER. I would certainly agree with you that you are changing the reporting line and the supervisory line of this official. You are not affecting the substantive law, as I see it. That is, the responsibilities of the Director of Locomotive Inspection and the basic regulations under which he carries those out are not affected by this plan. If the statute sets up certain criteria for inspections, this in no way affects it.

Mr. DONOHUE. How is the work allocated now by the Interstate Commerce Commission among the five separate divisions within the Commission?

Mr. STAUFFACHER. I have a statement of that, sir. It is a fairly complex type of thing to go into. The Commission has set up these five divisions. Would you like to have me go into that?

Mr. DONOHUE. If you could, by way of caption, tell me what the five divisions are.

Mr. STAUFFACHER. Division 1 is the Administrative Division.

Mr. DONOHUE. What are the duties of the present Administrative Division?

Mr. STAUFFACHER. The general conduct of administrative matters, not otherwise assigned or reserved, including such matters-and I am reading literally now-as salaries and personnel, finance, cooperation with State commissions, organization, staff assignments, reporting, and the annual report.

That is the general Administrative Division.

Mr. DONOHUE. They do not assign the cases that come in; the Administrative Division does not do that?

Mr. STAUFFACHER. They have a good deal to do with it. Actually, as a matter of fact, the document indicates under this general statement what matters in detail in the law will be handled by the Divisions, so that any matters which then arise under those portions of the law are today fairly automatically docketed by the Secretary, who is a part of the Bureau that reports to this Division, for work by those respective parts of the Commission.

Mr. DONOHUE. Does that include allocating the cases that come in? Mr. STAUFFACHER. Yes.

Mr. DONOHUE. So that the Chairman would undoubtedly have someon acting in a capacity similar to the Administrative Division at present?

Mr. STAUFFACHER. The Chairman today serves as ex officio member of the Administrative Division, and that has been the regular practice.

Division 2 has to do with rates, tariffs, and valuations.

Division 3 is rates, service, and safety.

Division 4 is finance.

Division 5 is motor carriers.

Mr. DONOHUE. Are there four Commissioners on each of those Divisions?

Mr. STAUFFACHER. Three Commissioners.

Mr. DONOHUE. There are 20 Commissioners in all?

Mr. STAUFFACHER. No; there are 11 Commissioners. In some cases there is overlapping.

The CHAIRMAN. May I ask a question for information? The Com. mission is divided up into five branches; is that right?

Mr. STAUFFACHER. Five divisions, and that is of the Commission. The organization of the staff of the Commission, however, is currently organized into 15 Divisions.

The CHAIRMAN. This Locomotive Inspection is one of the Divisions? Mr. STAUFFACHER. Yes, sir; and, pardon me, let me use the word "bureaus" on that.

The CHAIRMAN. This will put the Bureau of Locomotive Inspection in line with the other four Division, or the other 14 Bureaus?

Mr. STAUFFACHER. Generally speaking, the latter, sir. I continue my statement.

Thus, the principle behind the pattern of organization contained in these plans is to improve administration by making one Commission member, the Chairman, responsible for day-to-day operations, thereby bringing unified leadership over the Commission staff and, at the same time, freeing the other Commissioners from administra

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