Kinnaird, John M., vice president, Government Relations Division, Ameri- can Trucking Associations; accompanied by Nelson Cooney, assistant Nassikas, Hon. John N., Chairman, Federal Power Commission; accom- panied by Emmett J. Gavin, assistant to the cahirman; L. H. Drennan, Jr., chief accountant, Office of Accounting and Finance; William Powell, Chief, Division of Systems, Office of Accounting and Finance; Daniel Goldstein, Assistant General Counsel, Office of the General Counsel; and McDonald, William J., senior vice president-law, Union Pacific Railroad Co., on behalf of the Association of American Railroads_-‒‒‒ Stafford, Hon. George M., Chairman, Interstate Commerce Commission; ac- companied by Fritz R. Kahn, General Counsel; Bob Brooks, Director, Office of Proceedings; John Grady, Director, Bureau of Accounts; and Garrett, Hon. Ray, Jr., Chairman, Securities and Exchange Commission; accompanied by John Burton, chief accountant; and Ralph C., Hocker, ADDITIONAL ARTICLES, LETTERS, AND STATEMENTS Allen, Charles E., general counsel, Federal Home Loan Bank Board, Securities and Exchange Commission: Page Comments concerning business combinations by common carriers-- 103–149 Additional comments concerning equipment trust financing-------- 150-219 Smith, Layton F., general partner, Salomon Brothers: Letter of April 30, 1974. Statement Tierney, Paul J., president, Transportation Association of America, letter of May 21, 1974. Trautman, Gerald H., chairman of the board, The Greyhound Corp., letter of May 24, 1974___ Union Tank Car Co., prospectus.. Utley, John F., chairman, Committee on Regulated Industries, American Wiley, Hon. Richard E., Chairman, Federal Communications Commission, REGULATED CARRIERS FINANCIAL STABILITY ACT WEDNESDAY, MAY 15, 1974 U.S. SENATE, COMMITTEE ON COMMERCE, SUBCOMMITTEE ON SURFACE TRANSPORTATION, Washington, D.C. The subcommittee met at 10 a.m. in room 5110 of the Dirksen Senate Office Building, Hon. Vance Hartke (chairman of the subcommittee) presiding. OPENING STATEMENT BY SENATOR HARTKE Senator HARTKE. The committee will come to order. This is the first of 2 days of hearings scheduled on S. 3356, a bill which would expand the jurisdiction of the Securities and Exchange Commission by removing certain exemptions in the securities regulations laws for transportation companies. During the conference on the Regional Rail Reorganization Act, the Senate conferees agreed to introduce and hold, hearings on this legislation. These hearings are intended to fulfill that commitment. S. 3356 meets the recommendations made in a staff study for the Subcommittee on Investigations of the House Commerce Committee following that subcommittee's investigation of the collapse of the Penn Central. The study, entitled "Inadequacies of Protections for Investors in Penn Central and Other ICC Regulated Companies," contended that protections provided investors under then existing ICC regulations were inadequate when compared with regulatory structure administered by the Securities and Exchange Commission. The study contended that by removing certain exemptions in the securities laws for transportation companies, the SEC could concentrate on its traditional role of disclosing information to securities investors and the ICC could continue to regulate the issuance of carrier securities for the purpose of insuring the financial stability of the carrier. At issue in these hearings is the adequacy of existing ICC regulations, which have not been changed significantly since the House Commerce Subcommittee report was published. We will also be examining the desirability and impracticality of the proposed concurrent regulatory structure and the impact of a strong investor protection program upon the stability of transportation company finances. Staff member assigned to these hearings: Paul A. Cunningham. S. 3356 proposes amendments not only to the Interstate Commerce Act, but to the Securities Act of 1933, the Securities and Exchange Act of 1934, the Trust Indenture Act of 1939, and the Investment, Company Act of 1940. Because our expertise lies largely in the field of surface transportation, we expect that if this bill is reported by this committee, it would be re-referred to the Senate Subcommittee on Securities for examination of its impact upon the securities regulatory structure. Our primary concern is potential impact of this legislation upon financial structure of transportation companies and investors in transportation securities. One of the primary issues raised by the proposed legislation is the practicality of concurrent regulation of securities by two agencies. Because of the experience of the Federal Power Commission, which has concurrent jurisdiction with the SEC over certain public utilities securities, we have asked the chairman of the FPC to testify this morning on the practicality of such a jurisdictional scheme. [The bill follows:] 93D CONGRESS 2D SESSION S. 3356 IN THE SENATE OF THE UNITED STATES APRIL 11, 1974 Mr. HARTKE introduced the following bill; which was read twice and referred to the Committee on Commerce A BILL To amend the Interstate Commerce Act and other statutes to promote the financial stability of regulated carriers, and for other purposes. 1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 3 That this Act may be cited as the "Regulated Carriers 4 Financial Stability Act". LO 5 SEC. 2. Section 20a of the Interstate Commerce Act 6 (49 U.S.C. 20a) is amended by deleting paragraph (7) 7 thereof and by redesignating paragraphs (8) through (12) 8 thereof as paragraphs (7) through (11) thereof. 9 10 SEC. 3. Section 214 of the Interstate Commerce Act (49 U.S.C. 557, as amended, 49 U.S.C. 314) is amended |