carriers with average gross revenues of $200,000 or more. On the basis of a limited study, it appears that the proposed $300,000 restriction on the exemp tion corresponds roughly to the present scope of the exemption in paragraph (10). Recommendation No. 10 S. 1148 This proposed bill would give effect to legislative recommendation No. 10 of the Interstate Commerce Commission as set forth on page 65 of its 78th annual report as follows: "We recommend that section 17 (2) be amended so as to authorize the Commission to delegate to qualified individual employees, including transportation economists and specialists, those matters which have not involved the taking of testimony at a public hearing or the submission of evidence by opposing parties in the form of affidavits." JUSTIFICATION In addition to a voluminous number of formal cases, the Commission's responsibilities under the act extend to numerous matters of relatively routine and specialized nature. For example, matters relating to extensions of time for filing annual, periodical, or special reports; rejection of tariff publications for failure to give lawful notice or failure to comply with the Commission's regulations; and orders assigning cases for hearing, extending dates for the filing of pleadings and postponing compliance dates. Except with respect to assignments to a division or an individual Commissioner, under the present provisions of section 17(2), the Commission may delegate such functions only to three-man boards, and the only employees eligible to serve on these boards are "examiners, directors or assistant directors of bureaus, chiefs of sections, and attorneys.” When applied to matters of the type described above, we believe that the mandatory requirements of section 17 (a) are unnecessary and unduly limit our authority in what essentially is an administrative area. The proposed bill has been narrowly drawn so as to affect only the processing of matters which have not involved the taking of testimony at a public hearing or the submission of evidence by opposing parties in the form of affidavits.' In this limited area the draft bill (1) would authorize the Commission to refer such matters to eligible individual employees, and (2) would expand the list of "eligible" employees to include assistant chiefs of sections, chiefs and assistant chiefs of branches, accountants, transportation economists and specialists, and other qualified persons designated by the Commission. In our judgment, enactment of the proposed legislation would enable us to utilize key employees more effectively and would contribute significantly to improved overall administrative efficiency. In this respect, a preliminary estimate indicates that as many as 22,000 matters of a routine or specialized nature could be handled each year by qualified Commission employees. APPENDIX LIST OF COMMISSION WORK, BUSINESS, AND FUNCTIONS WHICH COULD BE DELEGATED TO INDIVIDUAL EMPLOYEES Bureau of Accounts 1. Authority to permit the use of prescribed accounts which by provisions of their own texts require special authority. 2. Authority to permit departures from general rules prescribing uniform systems of accounts. 3. Authority to prescribe by order, rates of depreciation to be used by individual carriers by railroad, water, and pipe line. 4. Authority to issue special authorizations permitted by the prescribed regulations governing the destruction of records of carriers. 5. Annual valuation of pipelines. 6. Approval of protective service contracts. It is apparent that matters arising under these items (about 125 a year) are of a highly technical nature; and in this circumstance, we believe that the profes 1 Matters of a type included in this category, together with brief comments pertaining thereto, are listed in an attached appendix. sional judgment of the Bureau Director or qualified members of his staff could be relied upon for their disposition. Bureau of Motor Carriers Authority for Bureau of Motor Carriers district supervisors to approve onetime shipment motor carrier temporary authorities, in bona fide emergencies, in the field. In about 100 cases annually, authorization is given for one-time shipments in severe emergencies; e.g., replacement parts for a transformer which has interrupted electrical power in a community; a bridge span portion to repair a bridge closed to traffic until repaired. Bureau of Operating Rights 1. Areas where orders now are entered in the name of a single Commissioner or Division I, such as orders assigning cases for hearing, orders extending dates for the filing of pleadings, orders postponing compliance dates, effective dates, and orders authorizing the changing of name of a carrier, etc. 2. Noncontested motor, water, and freight forwarder application cases of the type now handled by Operating Rights Board No. 1. Item No. 1 would relieve Commissioners of the possibility of dealing personally with up to 10,000 items a year. Item No. 2 appears desirable since actions of Board No. 1 about 1,200 a year, are seldom questioned by the filing of petitions for reconsideration, and it is believed that the nature of the cases is such that delegations to an individual would be just as effective. Bureau of Traffic Approval of special permission applications, now handled by the Special Permission Board, consisting of three members. There are about 10,000 of these items coming before the Special Permission Board each year. If this work is delegated to individuals, it probably would be divided among as many as three persons because of the volume. However, rather than have two or three board members look at each request for special permission (e.g., each board member now reviews about 6,700 a year), each of 3 indiivdual delegates would look at one-third of the total number or about 3,300. Bureau of Transport Economics and Statistics 1. Matters relating to annual, periodical, or special reports of carriers, lessors, brokers, freight forwarders, and other persons under parts I, II, III, and IV, presently assigned to Division 2. For example, approval of changes in the reporting forms and other requirements which often are made to conform them to corresponding changes in the Commission's acounting rules governing the respective types of carriers. 2. Extensions of time for filing annual, periodical, or special reports; exemption of individual carriers and others from reporting requirements, access to waybills or photostat copies thereof; and public inspection of monthly accident reports, now assigned to the Vice Chairman. These items are routine in nature. For example, the extension of filing dates is essentially an administrative matter, as is the granting of access to waybills or to accident reports. These delegations would relieve Division 2 of the necessity of passing upon some 25 report matters each year, and the the Vice Chairman of acting on 200 applications per year in matters currently asisgned to him. Recommendation No. 11 S. 1149 This proposed bill would give effect to legislative recomendation No. 11 of the Interstate Commerce Commission as set forth on page 66 of its 78th annual report as follows: "We recommend that section 19(a) be amended in the following respects: (1) to eliminate the requirement that the Commission determine the present vaue of land; (2) to eliminate the requirement that the Commission determine the valuation of property held by carriers for purposes other than for use in common carrier service; (3) to eliminate the requirement that the Commission ascertain and report the amount, value, and disposition of aids, gifts, grants, and donations and the amount and value of concessions and allowances made by carriers in consideration thereof; and (4) to make optional the requirement that the Commission keep itself informed of changes in the quantity of the property of carriers, following the completion of the original valuation of such property." JUSTIFICATION The purpose of the attached draft bill is to eliminate or make optional certain mandatory valuation requirements which are no longer considered necessary or appropriate to the proper performance of the regulatory functions of the Interstate Commerce Commission. Foremost among these are the requirements (1) that the Commission determine the present value of carrier land holdings, and (2) that the Commission keep itself informed of changes in the quantity of the property of carriers following the completion of the original valuation of such property. The requirement that the Commission determine the present value of land was appropriate in finding original property valuations under an earlier concept which also gave consideration to the reproduction cost of property other than land. Accounting methods have changed, however, and today the concept of "reproduction cost" generally is in disuse by this Commission for rail ratemaking purposes. In this respect, it is significant that the Commission, in establishing a base for measuring rate of return for railroads, now uses the original cost of property other than land less depreciation thereon as shown on the books of the carrier, and to this sum is added an allowance for working capital and the estimated present value of land. Clearly, this formula would be more logical and consistent if the original cost of land were substituted for a determination of present value. There has been considerable latitude for a number of years with respect to what might properly be considered in ariving at a rate base, and the wide choice available to regulatory agencies in this connection has been recognized by the Supreme Court. In Federal Power Commission v. Natural Gas Pipeline Co., 315 U.S. 586 (1942), the Court held that "The Constitution does not bind ratemaking bodies to the service of any single formula or combination of formulas * * *," and in Federal Power Commission v. Hope Natural Gas Co., 320 U.S. 602 (1944), the Court amplified its opinion in the Natural Gas Pipeline Co. case by holding that "it is not the theory but the impact of the rate order which counts. If the total effect of the rate order cannot be said to be unjust and unreasonable, judicial inquiry under the act is at an end. The fact that the method employed to reach that result may contain infirmities is not then important. *** In the absence of a continuous need for present value of land data by the Commission, it is not in the public interest to spend large sums of money to develop the information and keep it reasonably current as contemplated by the present statutory requirement. At the present time, by virtue of regulations issued by the Commission pursuant to the mandatory requirement in section 19a (f) of the Interstate Commerce Act, railroads and pipeline companies must report annually the number of units of property acquired or retired during the year. This information is utilized in determining the cost of reproduction of such property. As indicated above, however, the concept of reproduction value is no longer the dominant consideration in the determination of a rate base for railroads; and, in this circumstance, we believe that this reporting requirement represents an unnecessary burden upon rail carriers. The situation with respect to the reporting of units of property changes by pipeline carriers, however, is unlike that of the railroads. The Commission finds property valuations for pipeline carriers each year; and, in this process, property units are used in the development of the cost of reproduction-new, an element which is considered by the Commission in arriving at rate bases for pipelines. For this reason, we recommend that, in lieu of repeal, the mandatory requirement in section 19a (f) be made optional as the needs of the Commission dictate. The Commission has made adequate provision for the proper accounting and financial reporting of noncarrier property, and the value of such property is not considered for valuation or ratemaking purposes. Therefore, we see no need to value noncarrier property as is presently required by the third subparagraph of section 19a (b) of the act. Insofar as aids, gifts, grants, and donations are concerned, practically all property in this category is of record in the original valuations found by the Commission for railroads. The significance of this information has diminished over the years, and carriers have long since discontinued the granting of 49-278-65--3 concessions in the form of land-grant rates in consideration of such gratuities. Accordingly, the draft bill would also repeal subparagraph "Fifth" of section 19a (b) of the act. Enactment of this draft bill would, in our opinion, result in a considerable saving to the railroad industry and, in principal effect, would eliminate a statutory requirement no longer necessary nor feasible because of the magnitude of the undertaking necessary to keep reasonably current. Recommendation No. 12 S. 1150 This proposed bill would give effect to legislative recommendation No. 12 of the Interstate Commerce Commission as set forth on page 67 of its 78th annual report as follows: "We recommend that section 20a (12) be amended so as (a) to eliminate the necessity for prior approval of the Commission for a person to hold the position of officer or director of more than one carrier when such carriers are in a single integrated system of carriers lawfully operated under common control, and (b) to make it clear that the prohibition against the holding by 'any person' of the position of officer or director of more than one carrier applies to the holding of such positions by different members, officers, employees, or directors, of the same firm, partnership, corporation, association, or joint stock association, or to the representation of a person on the board of directors of more than one carrier through an agent or nominee." JUSTIFICATION The first sentence of section 20a (12) requires persons desiring to serve as an officer or director of more than one carrier to file an application and obtain approval from the Commission even though the carriers involved are affiliated members of the same system of carriers. Where railroads are under lawful common control, they form essentially a single system. Louisville & J. B. R. Co. Merger, 295 I.C.C. 11. In this circumstance, the holding of intrasystem interlocking officer positions and directorships is a natural aid to coordination of operations, and the Commission has long approved such applications as a matter of course. Nevertheless, the filing and processing of formal applications for such authority entail considerable time and expense both for the applicant and the Commission which could be saved without adversely affecting the public interest. A total of 851 interlocking directorship applications were filed during the period covered by the Commission's 74th, 75th, 76th, and 77th annual reports to Congress (1960 through 1963). Since only about 2 percent of these applications involved position in unaffiliated carriers, the time and money consumed in filing and processing approximately 98 percent of these applications could have been saved if the section were revised as recommended. Moreover, a considerable reduction in recordkeeping expenses would have been realized. Regulation of the holding of officer positions and directorships in two or more unaffiliated carriers under section 20a (12) should, of course, be continued in order, among other things, to prevent the acquisition of control by one carrier over another, or the control or management of two carriers in a common interest without prior approval of the Commission under section 5 of the act. However, we believe that section 20a (12) should be strengthened by making it also apply when an officer, director, or partner of a noncarrier (for example a holding company or brokerage firm) also holds a position as an officer or director of a carrier and another officer, director or partner of the same noncarrier holds a similar position with another, an unaffiliated, carrier. There is, in our opinion, little difference between (a) two directors or partners in a noncarrier separately holding positions with two different carriers, and (b) an individual holding such positions. The possibilities of achieving common control of the carriers and the undesirable practices which section 20a (12) was designed to prevent, are practically the same in both situations. The use of different officers of noncarrier holding companies and brokerage firms to control the affairs of two or more unaffiliated carriers can thus circumvent the present section and defeat its purpose. S. 1152 Recommendation No. 17 This proposed bill would give effect to Legislative Recommendation No. 17 of the Interstate Commerce Commission as set forth on page 71 of its 78th annual report as follows: "We recommend that section 220 (f) of the Interstate Commerce Act, section 8 of the Locomotive Inspection Act, and section 4 of the Accident Reports Act be amended so as to (a) incorporate in the Locomotive Inspection Act a prohibition against use in a damage suit of any report sent by a carrier under that act; (b) prohibit the introduction in evidence in any damage suit of the report submitted to the Commission by its accident investigators; (c) prohibit expert opinion testimony by the Commission's accident investigators in damage suits; and (d) restrict factual testimony by the Commission's accident investigators to cases where factual evidence is not reasonably available from other sources." JUSTIFICATION This Commission faces the same problems as those outlined by the Civil Aeronautics Board (109 Congressional Record, 4491-4492) in regard to efforts of litigants to compel Commission employees who have investigated an accident to testify in damage suits. In this respect, therefore, our draft bill follows the same lines as proposed in companion bills S. 1136 and H.R. 5200, introduced during the 88th Congress at the request of the CAB. In addition, our proposed measure would resolve a related problem which arises from differences in the wording of similar sections in acts we administer, and involves efforts of litigants to compel the production of accident reports submitted by Commission investigators and, in the case of rail accidents, the reports submitted by the carriers as well. Section 25 (f) of the Interstate Commerce Act, 49 U.S.C., section 26 (f); sections 1 to 3 of the Accident Reports Act, 45 U.S.C., sections 38 to 40; and section 8 of the Locomotive Inspection Act. 45 U.S.C., section 32, require rail carriers subject to Commission regulation to report to the Commission all accidents in which such carriers may be involved, and charge the Commission with the duty of investigating and making reports concerning such accidents. Under authority of section 204 (a) of the act, 49 U.S.C., section 304 (a), motor carriers are required by regulation to report accidents of a certain severity, and investigations and reports on many of these are made. The Commission's investigation is performed in large measure by investigators employed by the Commission's Bureau of Motor Carriers and Bureau of Safety and Service. Written reports are prepared by these investigators as to all accidents investigated by them, which embody their factual observations and conclusions. These reports are submitted to the Commission and form the basis for the Commission's accident reports. Section 220(f) of the Intertate Commerce Act, section 4 of the Accident Reports Act, and section 8 of the Locomotive Inspection Act prohibit the introduction in evidence or the use for any purpose in damage suits of the Commission's report of investigation. The first two acts mentioned also prohibit such use of the report of carriers. The congressional purpose in excluding such reports clearly is to protect the integrity of the Commission's accident investigation function and to facilitate the securing of full and complete accident reports from the carriers involved. The statutes as now worded, however, do not literally cover the report which the investigator submits to the Commission nor do they cover expert opinion evidence given by way of live testimony by the Commission investigator. Also, the Locomotive Inspection Act does not literally cover the report submitted by the carriers. Efforts of litigants to subpena the report of Commission investigators, and to compel such investigators to give expert testimony in damage suits, have uniformly been resisted by the Commission on the ground that the purpose and policy of the cited statutes require that such information not be disclosed in damage suits. For the most part, our resistance has been successful, but we have been handicapped by the absence of a clear statutory provision governing the situation. The number of such subpenas could be expected to decline sharply upon the enactment of a clear-cut statutory provision, with a resultant saving in the time which the Commission and its staff must devote to such matters. The bill proposed by the CAB is based upon the principles enunciated by the Court in Universal Airlines v. Eastern Air Lines, 188 F. 2d 993, and the Commission concurs in those principles and the procedure therein suggested. Under such procedures, no private litigant will be denied factual testimony essential to |