1939: Interstate Commerce Commission

On July 1, 1939, the Commission made a redistribution of its functions within its own organization. The salient features of the new organization are as follows: The former practice of having the chairmanship rotate among the members, with a new chairman each year, was modified by electing a chairman for a term of 3 years. The eleven members under the new plan are grouped in five divisions, each with three regular members. Division 1 handles the principal administrative and business tasks and is headed by the chairman. This makes it possible to eliminate most of the standing committees previously existing. The rate work is divided between Divisions 2 and 3. Division 2 also has charge of valuation and various technical matters. Safety regulation is assigned to Division 3. Division 4 deals with finance matters, reorganizations, and intercorporate relations of carriers. Division 5 has charge of the major problems peculiar to motor carriers, but motor carrier rates, finances, and certain other subjects have been assigned to other divisions. The general nature of the changes indicates an attempt to distribute duties on a functional basis to a greater extent than heretofore. Increased authority was given to individual commissioners to dispose of certain matters. The various bureaus continue to report through an individual commissioner to a division or to the Commission. All matters decided by a commissioner or a division may finally come on appeal to the whole Commission.

Progress was made during the year in the work of reorganizing railroads. In the 12 months' period ended Oct. 31, 1939, plans of reorganizing two roads previously approved by the Commission were confirmed by the courts, and the Commission approved and issued reorganization plans for 3 other railroads. For 6 additional bankrupt roads tentatively proposed plans were made public, and hearings in various other such cases were concluded. Authority was granted the Baltimore & Ohio Railroad and the Lehigh Valley Railroad to take steps for a voluntary readjustment of their indebtedness. Acquisition of control of the Louisiana and Arkansas Railway by the Kansas City Southern Railway was approved, as was also the merger of the properties of the Gulf Mobile & Northern Railroad and the Mobile & Ohio Railroad.

There was a constant flow of decisions in rate cases. Of importance in 1939 was one permitting the Railway Express Agency to revise its rates to secure additional revenue (231 I.C.C. 471); another prescribed nonprejudicial rates on sugar between the South and East (234 I.C.C. 247); revised key rates were prescribed on all-rail class rate traffic between points in Southern and Western territories (231 I.C.C. 315); divisions of rates were prescribed between important groups of carrier (234 I.C.C., 135 and 175); and the Commission directed rail carriers to comply with the regulations relating to motor vehicles when substituting that type of service for rail service (232 I.C.C. 683). Further proceedings were had in 1939 designed to establish minimum motor carrier rates in various regions. Rules were prescribed to govern the transportation of household goods by motor vehicle common carriers (Ex Parte MC-19).

Of various opinions handed down by the U. S. Supreme Court in 1939 with respect to the powers of the Interstate Commerce Commission probably one of most general interest is Rochester Telephone Corp. vs. U. S. (307 U. S. 125). In this case the count held that negative as well as affirmative orders of the Commission are subject to review by the courts. This reversed earlier decisions on the same subject.

Further steps were taken in 1939 by the Interstate Commerce Commission to promote the safety of operation. It cooperated with the Association of American Railroads in the development of revised specifications for the structural design of new passenger train cars. Effective Sept. 1, 1939, new regulations regarding signal systems were prescribed. In the course of the inspection of steam locomotives, 9 per cent were found with defects that should have been corrected before the locomotives were put into service. Eleven service orders were issued modifying the regulations for the safe transportation of explosives and other dangerous articles. Revised safety regulations were adopted for motor carriers covering the qualification of drivers, the driving of the vehicles, parts and accessories, reporting of accidents, hours of service, and inspection and maintenance. Twenty safety inspectors were added to enforce these regulations in cooperation with the states. (See also RAILROADS.)

The staff of attorneys and special agents engaged in detecting and prosecuting violations of the law has been augmented. During 1939, 208 convictions were obtained against carriers and shippers for violation of the motor carrier act and appropriate decrees were entered in 76 cases. The fines imposed totaled $134,724. For violating other parts of the Interstate Commerce Act, 41 convictions or pleas of guilty were obtained with fines of $68,000.

In the valuation work, the year 1939 has brought to a close the making of inventories and basic valuations of practically all of the major oil and gasoline pipe line companies.

The statistical staff of the Commission was expanded in 1939 to develop more information regarding the cost of service of various classes of carriers.

For a more extended account of the Commission's activities in 1939, reference should be made to its 53rd Annual Report.