Secs. 4-5 distance to be pensatory. rates, on circui may from time to time prescribe the extent to which such designated common carrier may be relieved from the operation of this section; but in exercising the authority conferred upon it in this proviso the Commission shall Charge for longer not permit the establishment of any charge to or from reasonably comthe more distant point that is not reasonably compensatory for the service performed; and if a circuitous rail line or route is, because of such circuity, granted authority to meet the charges of a more direct line or route to or from competitive points and to maintain higher Intermediate charges to or from intermediate points on its line, the tous lines. authority shall not include intermediate points as to which the haul of the petitioning line or route is not longer than that of the direct line or route between the competitive points; and no such authorization shall be water competi granted on account of merely potential water competi- for relief. tion not actually in existence: And provided further, That rates, fares, or charges existing at the time of the Maintenance of passage of this amendatory part by virtue of orders of pending order by the Commission or as to which application has theretofore been filed with the Commission and not yet acted upon, shall not be required to be changed by reason of the provisions of this section until the further order of or a determination by the Commission. Merely potential tion not ground existing rates Commission. meet water com (2) Wherever a carrier by railroad shall in competi- Rates reduced to tion with a water route or routes reduce the rates on the petition not raised without finding carriage of any species of freight to or from competitive by Commission. points it shall not be permitted to increase such rates unless after hearing by the Commission it shall be found that such proposed increase rests upon changed conditions other than the elimination of water competition. COMBINATIONS AND CONSOLIDATIONS OF CARRIERS 41 Stat. L. 480. SEC. 5. [As amended August 24, 1912, February 28, 24 Stat. L. 380. 1920, June 10, 1921, June 16, 1933, and August 9, 1935.] 48 Stat. L. 217. [U. S. Code, title 49, sec. 5.]1 (1) That, except upon spe- and division of cific approval by order of the Commission as in this sec- earnings forbid 1 The Emergency Railroad Transportation Act, 1933, approved June 16, 1933, made numerous amendments to section 5 of the Interstate Commerce Act which have been carried into the following statement of the text. Secs. 201-203 of the Act cited. Section 204 of the Emergency Railroad Transportation Act, 1933, is as follows: “SEC. 204. [U. S. Code, title 49, sec. 5a.] The provisions of the Interstate Commerce Act, as amended, and of all other applicable Federal statutes, as in force prior to the enactment of this title, shall remain in force, as though this title had not been enacted, 49 Stat. L. 543. Pooling of freight den. Sec. 5 permit, with as sent of carriers. tion provided, and except as provided in paragraph (16) of section 1 of this part, it shall be unlawful for any common carrier subject to this part to enter into any contract, agreement, or combination with any other common carrier or carriers for the pooling of freights of different and competing railroads, or to divide between them the aggregate or net proceeds of the earnings of such railroads, or any portion thereof; and in any case of an agreement for the pooling of freights as aforesaid each day of its conCommission may tinuance shall be deemed a separate offense: Provided, That whenever the Commission is of opinion, after hearing upon application of any carrier or carriers engaged in the transportation of passengers or property subject to this part, or upon its own initiative, that the division of their traffic or earnings, to the extent indicated by the Commission, will be in the interest of better service to the public, or economy in operation, and will not unduly restrain competition, the Commission shall have authority by order to approve and authorize, if assented to by all the carriers involved, such division of traffic or earnings, under such rules and regulations, and for such consideration as between such carriers and upon such terms and conditions, as shall be found by the Commission to be just and reasonable in the premises.2 48 Stat. L. 217. Consolidation of railways give plan. -competition and trade channels preserved. (2) The Commission shall as soon as practicable prepare and adopt a plan for the consolidation of the railCommission to way properties of the continental United States into a adopt comprehen- limited number of systems. In the division of such railways into such systems under such plan, competition shall be preserved as fully as possible and wherever practicable the existing routes and channels of trade and commerce shall be maintained. Subject to the foregoing requirements, the several systems shall be so arranged that the cost of transportation as between competitive systems and as related to the values of the properties through which the service is rendered shall be the same, so far as practicable, so that these systems can employ uniform rates in with respect to the acquisition by any carrier, prior to the enactment of this title, of the control of any other carrier or carriers." The provisions of the Interstate Commerce Act, as amended prior to the amendment of June 16, 1933, to which the foregoing saving clause applies, are not set out in this compilation. 'Creation and administration of pooling arrangements by order of Federal Coordinator of Transportation, Emergency Railroad Transportation Act, 1933, sec. 8 (48 Stat. L. 214) [U. S. Code, title 49, sec. 258]. the movement of competitive traffic and under efficient management earn substantially the same rate of return. upon the value of their respective railway properties. Sec. 5 Hearings upon 48 Stat. L. 217. (3) When the Commission has agreed upon a tentative plan, it shall give the same due publicity and upon rea- tentative plan of sonable notice, including notice to the Governor of each consolidation. State, shall hear all persons who may file or present objections thereto. The Commission is authorized to prescribe a procedure for such hearings and to fix a time for bringing them to a close. After the hearings are at an end, the Commission shall adopt a plan for such Adoption of consolidation and publish the same; but it may at any tions. time thereafter, upon its own motion or upon application, reopen the subject for such changes or modifications as in its judgment will promote the public interest. plan; publication; modifica consolidation or ties. contract, to oper (4) (a) It shall be lawful, with the approval and authorization of the Commission, as provided in subdivi- 48 Stat. L. 217. sion (b), for two or more carriers to consolidate or merge their properties, or any part thereof, into one corpora- Authorization of tion for the ownership, management, and operation of merger of properthe properties theretofore in separate ownership; or for any carrier, or two or more carriers jointly, to purchase, lease, or contract to operate the properties, or any part Purchase, lease, thereof, of another; or for any carrier, or two or more ate properties. carriers jointly, to acquire control of another through Acquisition of purchase of its stock; or for a corporation which is not a chase of stock. carrier to acquire control of two or more carriers through ownership of their stock; or for a corporation which Control by stock is not a carrier and which has control of one or more carriers to acquire control of another carrier through ownership of its stock. control by pur ownership by noncarrier corporations. Commission. (b) Whenever a consolidation, merger, purchase, lease, operating contract, or acquisition of control is proposed under subdivision (a), the carrier or carriers or corporation seeking authority therefor shall present an application to the Commission, and thereupon the Commission Application to shall notify the Governor of each State in which any part of the properties of the carriers involved in the proposed Hearing. transaction is situated, and also such carriers and the applicant or applicants, of the time and place for a public hearing. If after such hearing the Commission finds Notice. that, subject to such terms and conditions and such Findings by 'Consolidation, merger, and acquisition of control of motor carriers, sec. 213, post. Commission Sec. 5 plan. modifications as it shall find to be just and reasonable, the proposed consolidation, merger, purchase, lease, operating contract, or acquisition of control will be in harmony with and in furtherance of the plan for the -harmony with consolidation of railway properties established pursuant to paragraph (3), and will promote the public interest, -public interest it may enter an order approving and authorizing such consolidation, merger, purchase, lease, operating contract, Order of approval or acquisition of control, upon the terms and conditions and with the modifications so found to be just and reasonable. promoted. by Commission. Noncarrier owner considered as for certain purposes. 48 Stat. L. 217. (5) Whenever a corporation which is not a carrier is common carrier authorized, by an order entered under paragraph (4), to acquire control of any carrier or of two or more carriers, such corporation thereafter shall, to the extent provided by the Commission, for the purposes of paragraphs (1) to (10), inclusive, of section 20 (relating to reports, accounts, and so forth, of carriers), including the penalties applicable in the case of violations of such paragraphs, be considered as a common carrier subject to the provisions of this part, and for the purposes of paragraphs (2) to (11), inclusive, of section 20a (relating to issues of securities and assumptions of liability of carriers), including the penalties applicable in the case of violations of such paragraphs, be considered as a "carrier" as such term is defined in paragraph (1) of such section, and be treated Securities of non- as such by the Commission in the administration of the subject to Act as paragraphs specified. In the application of such provisions of section 20a in the case of any such corporation the Commission shall authorize the issue or assumption applied for only if it finds that such issue or assumption Findings of Com- is consistent with the proper performance by each carrier uisite to author which is under the control of such corporation of its service to the public as a common carrier, will not impair the ability of any such carrier to perform such service, and is otherwise compatible with the public interest. carrier-owner carrier. mission prereq ization. Control or management unlaw vided by par. (4). 48 Stat. L. 218. (6) It shall be unlawful for any person, except as proful except as provided in paragraph (4), to accomplish or effectuate, or to participate in accomplishing or effectuating, the control or management in a common interest of any two or more carriers, however such result is attained, whether Similar provision as to persons controlling motor carriers, sec. 213 (a) (2), post. 'Similar provision, Motor Carrier Act, 1935, sec. 213 (b) (1), post. Sec. 5 directly or indirectly, by use of common directors, officers, or stockholders, a holding or investment company or companies, a voting trust or trusts, or in any other manner whatsoever. It shall be unlawful to continue to maintain control or management accomplished or effectuated after the enactment of this amendatory paragraph and in violation of its provisions. As used in this paragraph and paragraph (7), the words "control or manage- “Control or ment " shall be construed to include the power to exercise control or management. management." (7) For the purposes of paragraphs (6) and (11), but 48 Stat. L. 218. not in anywise limiting the application thereof, any transaction shall be deemed to accomplish or effectuate the Means of effectcontrol or management in a common interest of two management carriers ing control or specified. (a) If such transaction is by a carrier, and if the effect of such transaction is to place such carrier and persons by carrier. affiliated with it, taken together, in control of another carrier. ated with carrier. (b) If such transaction is by a person affiliated with a —by person afflicarrier, and if the effect of such transaction is to place such carrier and persons affiliated with it, taken together, in control of another carrier. persons, one a carrier or affiliate. (c) If such transaction is by two or more persons acting by two or more together, one of whom is a carrier or is affiliated with carrier, and if the effect of such transaction is to place such persons and carriers and persons affiliated with any one of them and persons affiliated with any such affiliated carrier, taken together, in control of another carrier. tion with carrier 48 Stat. L. 218. (8) For the purposes of paragraph (7) a person shall Person's affiliabe held to be affiliated with a carrier if, by reason of the defined. relationship of such person to such carrier (whether by reason of the method of, or circumstances surrounding organization or operation, or whether established through common directors, officers, or stockholders, a voting trust or trusts, a holding or investment company or companies, or any other direct or indirect means), it is reasonable to believe that the affairs of any carrier of which control may be acquired by such person will be managed in the interest of such other carrier. (9) For the purposes of paragraphs (6), (7), (8), and 48 Stat. (11), wherever reference is made to control it is imma Contro' or in 6 post. Similar provision in Motor Carrier Act, 1935, sec. 213 (b) (3), |