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Sec. 1

FEDERAL POSSESSION AND CONTROL ACT. [Provision from the Army Appropriation Act, August 29,

1916.)

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take over systems

e Presidente may The President, in time of war, is empowered, through of transportation. the Secretary of War, to take possession and assume

control of any system or systems of transportation, or any part thereof, and to utilize the same, to the exclusion as far as may be necessary of all other traffic thereon, for the transfer or transportation of troops, war material and equipment, or for such other purposes connected with the emergency as may be needful or desirable.

guarantee

just

carrier under federal control.

FEDERAL CONTROL ACT [AS AMENDED).
AN ACT To provide for the operation of transportation systems while

under Federal control, for the just compensation of their owners, and
for other purposes.

Be it enacted by the Senate and House of Representa

tives of the United States of America in Congress assembled. 40 Stat. L., 451. SEC. 1. That the President, having in time of war

taken over the possession, use, control, and operation (called herein Federal control) of certain railroads and

systems of transportation (called herein carriers), is President may hereby authorized to agree with and to guarantee to any compensation" to such carrier making operating returns to the Interstate federal control. * Commerce Commission, that during the period of such

Federal control it shall receive as just compensation an annual sum, payable from time to time in reasonable installments, for each year and pro rata for any fractional year of such Federal control, not exceeding a sum equivalent as nearly as may be to its average annual railway operating income for the three years ended June

thirtieth, nineteen hundred and seventeen. * Acess income That any railway operating income accruing during States. the period of Federal control in excess of such just com

pensation shall remain the property of the United States.

In the computation of such income, debits and credits Computation of arising from the accounts called in the monthly reports railway operating

o to the Interstate Commerce Commission equipment rents and joint facility rents shall be included, but debits and credits arising from the operation of such street electric passenger railways, including railways com

Maximum.

belongs to United

incomo.

anges in lines,

Certification of

Seo. 1 monly called interurbans, as are at the time of the agreement not under Federal control, shall be excluded. If because of any lines were acquired by, leased to, or consolidated char with such railroad or system between July first, nineteen hundred and fourteen, and December thirty-first, nineteen hundred and seventeen, both inclusive, and separate operating returns to the Interstate Commerce Commission were not made for such lines after such acquisition, lease, or consolidation, there shall (before the average is computed) be added to the total railway operating income of such railroad or system for the three years ended June thirtieth, nineteen hundred and seventeen, the total railway operating income of the lines so acquired, leased, or consolidated, for the period beginning July first, nineteen hundred and fourteen, and ending on the date of such acquisition, lease, or consolidation, or on December thirty-first, nineteen hundred and seventeen, whichever is the earlier. The average annual railway annual income

matot by Commission, operating income shall be ascertained by the Interstate Commerce Commission and certified by it to the President. Its certificate shall, for the purpose of such agreement, be taken as conclusive of the amount of such average annual railway operating income.

Every such agreement shall provide that any Federal bom taxes under the Act of October third, nineteen hundred and seventeen, or Acts in addition thereto or in amendment thereof, commonly called war taxes, assessed for the period of Federal control beginning January first, nineteen hundred and eighteen, or any part of such period, shall be paid by the carrier out of its own funds, or shall be charged against or deducted from the just compensation; that other taxes assessed under Federal or Other taxos any other governmental authority for the period of Federal control or any part thereof, either on the property used under such Federal control or on the right to operate as a carrier, or on the revenues or any part thereof derived from operation (not including, however, assessments for public improvements or taxes assessed on property under construction, and chargeable under the classification of the Interstate Commerce Commission to investment in road and equipment), shall be paid out of revenue derived from railway operations while under Federal control; that all taxes assessed under Federal or any other governmental authority for the period prior to January first, nineteen hundred and eighteen, whenever levied or

War taxes tobo borne by carrier

mmerce Come paid out of Federal con

Provisions for

counting.

Sec. 1.

payable, shall be paid by the carrier out of its own funds, or shall be charged against or deducted from the just

compensation. Provisions for Every such agreement shall also contain adequate and pait renewals, appropriate provisions for the maintenance, repair, reand depreciation,

newals, and depreciation of the property, for the creation of any reserves or reserve funds found necessary in connection therewith, and for such accounting and adjustments of charges and payments, both during and at the end of Federal control as may be requisite in order that the property of each carrier may be returned to it in substantially as good repair and in substantially as complete equipment as it was in at the beginning of Federal control, and also that the United States may, by deductions from the just compensations or by other proper means and charges, be reimbursed for the cost of any

additions, repairs, renewals, and betterments to such Basis of ac- property not justly chargeable to the United States; in

making such accounting and adjustments, due consideration shall be given to the amounts expended or reserved by each carrier for maintenance, repairs, renewals, and depreciation during the three years ended June thirtieth, nineteen hundred and seventeen, to the condition of the property at the beginning and at the end of Federal control and to any other pertinent facts

and circumstances. President may The President is further authorized in such agreement make other pro

to make all other reasonable provisions, not inconsistent with the provisions of this Act or of the Act entitled "An Act making appropriations for the support of the Army for the fiscal year ending June thirtieth, nineteen hundred and seventeen, and for other purposes," approved August twenty-ninth, nineteen hundred and sixteen, that he may deem necessary or proper for such Federal control or for the determination of the mutual rights and obligations of the parties to the agreement arising from or out of

such Federal control. to carriers on If the President shall find that the condition of any averago incomo. carrier was during all or a substantial portion of the

period of three years ended June thirtieth, nineteen hundred and seventeen, because of nonoperation, receivership, or where recent expenditures for additions or improvements or equipment were not fully reflected in the operating railway income of said three years or a substantial portion thereof, or because of any unde

visions.

other basis than

Act extend

to

terurban electric

Secs. 1 and 2 veloped or abnormal conditions, so exceptional as to make the basis of earnings hereinabove provided for plainly inequitable as a fair measure of just compensation, then the President may make with the carrier such agreement for such amount as just compensation as under the circumstances of the particular case he shall find just.

That every railroad not owned, controlled, or operated Provisions of by another carrier company, and which has heretofore competing or concompeted for traffic with a railroad or railroads of which the President has taken the possession, use, and control, or which connects with such railroads and is engaged as a common carrier in general transportation, shall be held and considered as within “Federal control,” as herein defined, and necessary for the prosecution of the war, and shall be entitled to the benefit of all the provisions of this Act: Provided, however, That nothing in Street and in this paragraph shall be construed as including any street railways not inor interurban electric railway which has as its principal source of operating revenue urban, suburban, or interurban passenger traffic, or sale of power, heat and light, or both.

The agreement shall also provide that the carrier shall Carrier shall ac accept all the terms and conditions of this Act and any regulation or order made by or through the President under authority of this Act or of that portion of the Act entitled “An Act making appropriations for the support of the Army for the fiscal year ending June thirtieth, nineteen hundred and seventeen, and for other purposes,” approved August twenty-ninth, nineteen hundred and sixteen, which authorizes the President in time of war to take possession, assume control, and utilize systems of transportation.

SEC. 2. That if no such agreement is made, or pending Payments to the execution of an agreement, the President may never- of unadjusted theless pay to any carrier while under Federal control an annual amount, payable in reasonable installments, not exceeding ninety per centum of the estimated annual amount of just compensation, remitting such carrier, in case where no agreement is made, to its legal rights for Determination any balance claimed to the remedies provided in section three hereof. Any amount thereafter found due such carrier above the amount paid shall bear interest at the rate of six per centum per annum. The acceptance of any benefits under this section shall constitute an acceptance by the carrier of all the provisions of this Act

cept terms of Act. claims for com

carrier on account

compensation.

of balance due.

Interest.

mitted

to

ref

of referees.

board.

district courts

mony.

Kepayment and shall obligate the carrier to pay to the United States,

with interest at the rate of six per centum per annum from a date or dates fixed in proceedings under section three, the amount by which the sums received under this

section exceed the sum found due in such proceedings. Unsdjusted Sec. 3. That all claims for just compensation not adpensation sub justed (as provided in section one) shall, on the appli

cation of the President or of any carrier, be submitted to

boards, each consisting of three referees to be appointed Appointment by the Interstate Commerce Commission, members of

which and the official force thereof being eligible for serv

ice on such boards without additional compensation. Powers con- Such boards of referees are hereby authorized to summon lerred upon

witnesses, require the production of records, books, correspondence, documents, memoranda, and other papers, view properties, administer oaths, and may hold hearings

in Washington and elsewhere, as their duties and the conAssistance ol venience of the parties may require. In case of disto procuro testi- obedience to a subpæna the board may invoke the aid of

any district court of the United States in requiring the attendance and testimony of witnesses and the production of documentary evidence, and such court within the jurisdiction of which such inquiry is carried on may, in case of contumacy or refusal to obey a subpæna issued to any person, corporation, partnership, or association, issue an order requiring appearance before the board, or the production of documentary evidence if so ordered, or the giving of evidence touching the matter in question; and

any failure to obey such order of the court may be punHearings. ished by such court as a contempt thereof. Such cases

may be heard separately or together or by classes, by such boards as the Interstate Commerce Commission in the first instance, or any board of referees to which any such cases shall be referred may determine. Said boards shall give full hearings to such carriers and to the United

States; shall consider all the facts and circumstances, Report to Pres- and shall report as soon as practicable in each case to the

President the just compensation, calculated on an annual basis and otherwise in such form as to be convenient and

available for the making of such agreement as is authorAgreement on ized in section one. The President is authorized to enter

into an agreement with such carrier for just compensation upon a basis not in excess of that reported by such board, and may include therein provisions similar to those authorized under section one. Failing such agreement,

basis of award autharized.

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