Mr. SENDER. Would this affect the right of appeal of a party that was dissatisfied with the decision of an individual employee? Mr. WEBB. No, it would not change the right of appeal in any way whatever. Senator LAUSCHE. Proceed. Mr. WEBB. S. 1149 would amend section 19a of the act to eliminate or make optional certain mandatory valuation requirements which are no longer considered necessary or appropriate to the proper performance of the Commission's regulatory functions. The Commission believes that it is not in the public interest to incur the expense of developing and maintaining data relating to the present value of land, when this information is no longer needed to determine a rate base. We also feel that S. 1149 would relieve the Commission and carriers of other unnecessary reporting and valuation requirements. However, it should be pointed out that the situation with respect to the reporting of units of property changes by pipeline carriers is unlike that of the railroads. The Commission finds property valuations for pipeline carriers each year. 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 the rate base for pipelines. Senator LAUSCHE. Does S. 1149 deal with pipelines also in exempting them from filing statements of the value of lands? Mr. WEBB. I would like to ask Director Paolo, the Director of our Bureau of Accounts, to comment on this matter. Mr. PAOLO. The present value of lands is usually determined by the Commission's staff. The proposed amendment to section 19a is not in any way considered to change the requirements with regard to pipelines. Senator LAUSCHE. I see. So that S. 1149 will not at all change your law affecting pipeline carriers? Mr. PAOLO. Let me put it this way: The act will be changed and it will be at the Commission's discretion, but, as I understand it, we have no contemplation of changing policy with regard to pipelines. Senator LAUSCHE. Proceed. Mr. WEBB. S. 1150 would amend section 20a (12) to eliminate the necessity for prior Commission approval for a person to hold the position of officer or director of more than one railroad where the carriers are part of a single integrated system lawfully operated under common control. In addition, it would make clear that the prohibition against the holding by "any person" of the position of officer or director of more than one railroad applies to the holding of such positions by different members of the same firm. The Commission regards interlocking officers and directors of a single integrated system as a natural aid to coordination of railroad operations. We generally approve these applications as a matter of course. To require the Commission to approve applications in these instances casts an unnecessary burden upon the carriers and the Commission. Senator LAUSCHE. Now, then, the primary objective of S. 1150 is to liberalize the right of a person to become an officer or director of more than one railroad where the railroads are part of a single integrated system lawfully operated under common control? Mr. WEBB. That is correct, Mr. Chairman. Senator LAUSCHE. That would mean where the facts showed that, while there are two carriers, they are under a single integrated control, the rule against occupying offices or directorships in two competing carriers would not apply? Mr. WEBB. That is correct. Senator LAUSCHE. Now, you say: In addition, it would make clear that the prohibition against the holding by "any person" of the position of officer or director of more than one railroad applies to the holding of such positions by different members of the same firm. What do you mean by that? Mr. WEBB. That would mean that if a member of a board of directors was an officer of bank A that another officer of bank A could not also serve. That is Senator LAUSCHE. Could not also serve? That is, a bank then could have two of its officers serving on a carrier's board? Is that correct? Mr. WEBB. I would like to ask Director Forbes if he would explain that. Senator LAUSCHE. All right. Illustrate what they can do. Mr. FORBES. We have several examples, for instance, where brokerage firms and partnerships are concerned, where one member of a brokerage firm would be chairman of a board of one railroad and another member of the same brokerage firm would be a president of a competing carrier. Senator LAUSCHE. Now, what do you intend to do? Stop that? Mr. FORBES. Yes, sir. They would have to file applications for authority in order to accomplish such membership on two competing carriers. Senator LAUSCHE. I subscribe to that, but what does this language mean: "In addition, it would make clear that the prohibition against the holding by 'any person' of the position of officer or director of more than one railroad applies to the holding of such positions by different members of the same firm"? That is exactly what it means, as I understand it. Mr. FORBES. Yes, sir. Senator LAUSCHE. What you have illustrated. Mr. FORBES. That is what it means. Senator LAUSCHE. All right. What would the situation be if you had a law firm? Mr. FORBES. Well, it would be the same. They would have to come in and file an application with the Commission for authority, and if the Commission saw fit, and it met the criteria, we might grant it. Otherwise it would be denied. At present, they can just go ahead and be elected to the board or become officers of any competing carrier, because they are Senator LAUSCHE. The evil you are trying to reach is that there arise at times conflicts of interest? Mr. WEBB. S. 1152 would amend section 220 (f) of the Interstate Commerce Act, section 8 of the Locomotive Inspection Act, and section 4 of the Accident Reports Act to restrict factual testimony by ICC investigators to cases where factual evidence is not reasonably available from other sources and to prohibit the use in a damage suit of (1) reports submitted by carriers under the Locomotive Inspection Act; (2) ICC accident investigators' reports; and (3) expert opinion testimony of investigators. Litigants frequently attempt to compel Commission employees who have investigated an accident to testify in damage suits. We do not believe that this is warranted when factual evidence is available through other sources. Such a practice severely interferes with the Commission work. In addition, S. 1152 would reconcile differences that exist in similar sections of the acts which we adminster. Senator LAUSCHE. Now, then, in an accident case brought against a carrier, this S. 1152 would prohibit the use in such a case of (1) reports submitted by carriers under the Locomotive Inspection Act-is that right? Mr. WEBB. That is true. Senator LAUSCHE (continuing). And (2) the reports of accident investigators Mr. WEBB. That is correct. Senator LAUSCHE (continuing). And (3) the opinions prepared for your Board expressly by the testimony of investigators? Mr. WEBB. That is correct. Senator LAUSCHE. Now, would this be an absolute prohibition or would it be possible under certain circumstances to call for such testimony? Mr. WEBB. No; the bill does provide that we could permit such testimony where the factual evidence does not appear to be reasonably available from other sources. It is not an absolute bar. Senator LAUSCHE. Then it means if and when an injured party has available testimony from ordinary sources, the ability to procure these reports under the three categories which I mentioned would not be available? Mr. WEBB. That is true. Senator LAUSCHE. Why is this wanted? Mr. WEBB. We have a great deal of difficulty in-well, it is primarily to have the time of our investigators who are frequently called unnecessarily we think-to testify. Also, the reports which are submitted by carriers under the Locomotive Inspection Act may now be used in damage suits, and we believe that they should be exempt from disclosure as are the reports submitted by motor carriers and by railroads of their accidents. Senator LAUSCHE. Is there a different law applicable to different carriers now? Mr. WEBB. Yes. The reports submitted by carriers under the Locomotive Inspection Act may be used in damage suits, but the reports submitted by railroads under the Safety Appliance Act may not be used in damage suits, nor may the reports of motor carriers be used in damage suits. Senator LAUSCHE. And this bill contemplates adopting a uniform law? Mr. WEBB. That is correct. Senator LAUSCHE. And whenever the plaintiff could show that the testimony desired was not available through the normal sources, he still could have available these reports? Mr. WEBB. Well, we would make available to him testimony of our investigators. Senator LAUSCHE. Yes. Would that be discretionary with you or mandatory? Mr. WEBB. It would be discretionary, Mr. Chairman. Senator LAUSCHE. It has just been suggested to me that request for similar legislation has been submitted to this committee by the Civil Aeronautics Board. Did you discuss this matter with the Civil Aeronautics Board members? Mr. WEBB. I do not believe that we have discussed it with them, but they have furnished to us a copy of their legislative recommendation. I believe they did that while they were considering it, before they formally submitted it to the Congress. Mr. SENDER. In your justification, Mr. Chairman, you point out that one of the purposes of the bill is to protect the integrity of the Commission's accident investigation function and to facilitate the securing of full and complete accident reports. Is that one of the reasons for this bill? Mr. WEBB. Yes; that is true. Senator LAUSCHE. Well, it would seem to me that that is an important reason. You want to make certain that you do not put the person interrogated or the company interrogated under fear and the desire not to submit factual reports. Is that correct? Mr. WEBB. Yes; that is right. Senator LAUSCHE. All right. Proceed with the next item. Mr. WALRATH. Mr. Chairman, not to correct my boss, my Chairman, but in 1963 Chairman Boyd and I, when I was then Chairman of the Commission, discussed this legislation we just left-in principle as well as the bill. us. Its predecessor was virtually identical with that which is now before So we were quite aware some 3 years ago of CAB's request, and our reasons and theirs seemed to be the same, just as you stated it. Senator LAUSCHE. Proceed to the next item. Mr. WEBB. S. 1153 would amend the Interstate Commerce Act and various related acts by eliminating the mandatory requirement that certain documents be filed under oath, and would grant the Commission discretion to require such an oath when deemed necessary. Elimination of these mandatory oaths would relieve carriers of a needless burden without in any way impairing the Commission's functions, and would preclude further delays and inconveniences resulting from inadvertent omissions of the oath. Retention of discretionary authority would enable the Commission to require an oath should the need arise. Senator LAUSCHE. Has there been any controversy about this item? Mr. WEBB. I am not aware of any, Mr. Chairman. Mr. KENNEY. Would filings made still be subject to the penalties of 18 United States Code for false statement? Mr. WEBB. Yes. That is right. Even though the statement was not made under oath, title 18, as I understand, it would permit prosecution. Mr. KENNEY. For false statement? Mr. WERB. False statement of material fact; yes, sir. Senator LAUSCHE. Then the purposes achieved through the requirement that the statement would be under oath are still achievable through the power to prosecute criminally when a false report is filed as set forth in title 18, section 1001? Mr. WEBB. Yes, that is right. Senator LAUSCHE. Section 1001 of title 18 provides that whoever files a false report in connection with these laws shall be subject to criminal prosecution. Mr. WEBB. That is right. Senator LAUSCHE. Whether he makes his statement under oath or not under oath? Mr. WEBB. That is right; yes. Mr. WEBB. S. 1731 would amend section 212 (a) of the act to make motor carrier operating authorities subject to suspension, change, or revocation for willful failure to comply with Commission rules or regulations and to provide uniformity between parts II and IV with respect to revocation procedure. It would also permit suspension of motor carrier operating rights, upon notice, for failure to comply with the Commission's insurance regulations. S. 1731 would enable the Commission to cope more effectively with serious violations of its regulations including those prescribed under the Transportation of Explosives Act. In addition, it would provide an added measure of protection to the public by empowering the Commission to suspend motor carrier rights, on short notice, when their cargo, public-liability, or property-damage insurance lapses or is canceled without replacement. Senator LAUSCHE. Is S. 1731 applicable only to motor carriers? Mr. WEBB. Yes. I believe that is correct. Only to motor carriers. Senator LAUSCHE. And this would give the Commission the power to suspend, change, or revoke a certificate for willful failure to comply with Commission rules or regulations? Mr. WEBB. Yes. At the present time section 212 provides for such power for failure to comply with part II or regulations promulgated thereunder, which means under part II. However, the Transportation of Explosives Act is a different act, not part of the Interstate Commerce Act. One of the purposes of this bill is to provide for revocation for willful failure to comply with the Transportation of Explosives Act. Senator LAUSCHE. And that is the primary purpose of asking for the passage of this bill? Mr. WEBB. Yes. I think that in my opinion is the major purpose. Senator LAUSCHE. That is, when a motor carrier fails to supply adequate reports dealing with his carriage of explosives, you do not have the power to suspend, change, or revoke? Mr. WEBB. No. Our power is limited to violations of rules and regulations promulgated under part II. Senator LAUSCHE. Thanks very much. Mr. WEBB. Thank you, Mr. Chairman. Senator LAUSCHE. We will have a 5-minute recess, gentlemen. (Whereupon, a recess was taken.) Senator LAUSCHE. The next witness will be Mr. L. E. Galaspie, director of transportation of the Reynolds Metals Co. of America. Mr. Galaspie. |