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1938: Interstate Commerce Commission

The Interstate Commerce Commission, organized originally in 1887, is charged with the duty of regulating transportation agencies engaged in interstate commerce: namely, steam railways, electric railways, motor carriers, pipe lines and certain water lines. It consists of eleven members appointed by the President and confirmed by the Senate. It is one of the independent agencies in that it reports directly to Congress and not to a Cabinet Officer. On Nov. 1, 1938, it employed 2.531 persons, of whom 1,796 were stationed at Washington and 735 in field offices. The Commission formerly had jurisdiction over telephone and telegraph companies, but its regulatory duties with respect to these were transferred to the Federal Communications Commission by an Act passed in 1934. The Interstate Commerce Commission's duties with respect to air mail service were transferred to the newly created Civil Aeronautics Authority on Aug. 22, 1938. It now has 14 bureaus dealing respectively with Administration, Accounts. Finance, Formal Cases, Informal Cases. Inquiry (Prosecutions), Law (Other court proceedings). Locomotive Inspection, Motor Carriers, Safety Service, Statistics, Traffic, and Valuation.

The most notable event in the recent history of the Commission was the extension of its jurisdiction by the Motor Carrier Act, 1935, to cover transportation by motor carriers engaged in interstate and foreign commerce. This act is known also as Part II of the Interstate Commerce Act. It applies to common carriers, contract carriers, brokers, and, to a limited extent, to private carriers. Amendments intended to facilitate the administration of the Motor Carrier Act and to clarify certain provisions thereof were enacted in 1938. The regulatory duties with respect to the common-carrier trucks and buses are more complete than with reference to other motor carriers and relate to filing and publication of rates and charges, prevention of unreasonable, discriminatory, or preferential rates, supervision of security issues, control of mergers or other unifications, uniform accounting, service, and safety. The execution of such duties is a vast undertaking owing to the many thousands of motor-carrier enterprises to be regulated.

During the year 1938 substantial progress was made toward disposing of the 93,364 applications for certificates, permits, and licenses, of which 20,617 have been approved, 42,670 denied or withdrawn, and 30,077 are pending. Regulations prescribing maximum hours of service for drivers of for-hire passenger carriers were made effective during the past year. The Motor Carrier Bureau employed 1,142 persons on Nov. 1, 1938, or 45 per cent of the total employed by the Commission.

In the year 1938, the Commission was actively engaged in considering plans for the reorganization of bankrupt railways in connection with proceedings under Section 77 of the Bankruptcy Act as amended. The reorganizations of two short-line railroads were completed, plans were approved for the reorganization of four large railroads, and hearings were concluded on others. On July 31, 1938, 31 per cent of the steam railway mileage was in the hands of the courts, either in receivership or in trusteeship under the bankruptcy act.

Service orders were issued in two emergencies during the year: one in July to promote the flow of traffic which was threatened with congestion on account of a dispute over trackage rights between Jackson and Paducah, Ky., and the other in September to expedite traffic in New England after the storm.

The inspection of locomotives, which began in 1911 and was extended in 1915 and 1924, was continued in 1938 and has resulted in largely eliminating the unnecessary hazards to employees engaged in operating the locomotives. The enforcement of laws designed to safeguard the lives of passengers and employees has been an important duty of the Commission since 1893, its powers in this respect having been extended from time to time. In 1937. Congress provided that carriers may not discontinue or materially modify installation of block signal systems, interlocking, and automatic train stop, train control, and cab signal devices without approval of the Commission.

The valuation of the railroads, at one time a major activity of the Commission, has been completed as to underlying reports, but in 1938 the work of keeping the valuations current was continued. A program of oil pipe line valuation was also carried on. The valuations are used in reorganization cases, rate cases, and for other purposes. In connection with a recent rate case decided in 1938, the value of the steam railways was found to be $20,988,000,000 as of Jan. 1. 1938 (Ex Parte 115, 229 I.C.C. 435, 451).

Among the outstanding rate decisions of 1938 are the following:

Ex Parte 123, Fifteen Per Cent Case (226 I.C.C. 41 and 229 I.C.C. 435) granted increases which, together with other increases in related proceedings in 1937, raised the freight rate level about 7.7 per cent.

Ex Parte 123, Eastern Passenger Fares in Coaches (227 I.C.C. 17) found unjustified proposed increased passenger fares in coaches, but on further hearing (227 I.C.C. 685) an increase to 2.5 cents a mile was permitted for a period of 18 months.

Pullman fares were increased 5 per cent by a decision dated June 20, 1938 (227 I.C.C. 644).

An opinion was issued on Oct. 11, 1938, in Docket No. 27,365. Freight Forwarding Investigation, pointing out abuses in that service.

One of the most important pending cases is No. 26,712. Rail and Barge Joint Rates, in which the reasonableness of the present differentials between all rail rates and corresponding rates by barge transportation is being investigated.

The Commission issues numerous publications, such as its annual report to Congress, opinions in the Interstate Commerce Commission Reports, Statistics of Railways, accident bulletins, and other periodical reports relating to traffic, employees, and various phases of the operations of common carriers.

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