The foregoing inconsistencies in the judicial review of actions by the independent agencies responsible for regulation of transportation are drawn into sharp focus, particularly when considered with our recommendation in chapter III of this part that a single independent agency, to be known as the Federal Transportation Commission, bet responsible for this activity. Even if that recommendation should not be adopted immediately, steps should be taken at an early date to eliminate the statutory differences in the jurisdiction of the judiciary, and of judicial proceedings, in this area of public responsibility.

As a minimum step toward reconciling these statutory differences, the Congress should make provision for having judicial review of all decisions arising in the economic regulation of transportation at the same level of the judicial hierarchy. This step can be completed by a statutory enactment that would vest such review authority in the circuit courts of appeals. To insure consistency of final judicial determinations in such cases, either party should have the right to appeal to the Supreme Court for further review of an adverse decision by a circuit court of appeals.

We believe that a further step can be taken, not only to facilitate consistency in judicial review of such cases, but also to expedite final court decisions. This involves the establishment of a single Transportation Circuit Court of Appeals. The proposed new court should have exclusive appellate jurisdiction in the judicial review of the decisions of the transportation regulatory agency. The scope and nature of its jurisdiction should be clearly limited to that of existing courts in their review of CAB and ICC decisions, and FMB decisions under the Shipping Act of 1916, because any change thereof would place upon the proposed court as unwarranted and unjustified responsibility. The proposed court should have jurisdiction to convene anywhere in the United States, as did the Emergency Court of Appeals. Establishment of this new court would tend toward increased consistency of judicial review decisions in the economic regulation of transportation, and further judicial review could be limited to certiorari, rather than appeal, to the Supreme Court.

We also recommend that the present statutory provision which permits the ICC, and the FMB with respect to cases arising under the Shipping Act of 1916, to intervene in judicial review of their decisions. be applied to the new Federal Transportation Commission. This can be accomplished either by having the Commission named as the titular defendant and by extending the right to intervene to the Department of Justice, or by continuing the present practice of naming the United States as titular defendant with the Commission having the right to be intervene. If the Federal Transportation Commission should not be created at an early date, it is recommended that interim legislative action be taken to grant the CAB authority to intervene in the judicial review of its decisions.33

COMPOSITION OF TRANSPORTATION COURT OF APPEALS

The Transportation Court of Appeals should consist of not less than three nor more than seven judges. Initial composition of the court should be based upon assignment of circuit judges to it by the Chief

This recommendation also applies to judicial review of FMB decisions arising under the ship construction and operating differential subsidy programs if those functions should not be transferred to the proposed Department of Transportation.

Justice of the United States. This would provide the court with a background of experience in judicial review processes. Thereafter vacancies would be filled through appointment by the President and confirmation by the Senate; with recommendation for confirmation being made by the Senate Committee on Interstate and Foreign Commerce. The judges should have life tenure and be entitled to the pay scale and other benefits applicable to appellate judges.

Appointees should be members of the bar and should have no financial interest in any transportation company. In order that legally trained Commissioners serving on the new Federal Transportation Commission, as well as qualified practitioners before it, may have an opportunity for future appointment to the court, it is recommended that in conjunction with any advice the President may receive from the Senate prior to nomination, informal arrangements be made whereby the executive branch may submit to the group representing such practitioners, for appraisal, the names of individuals under serious consideration for nomination by the President. Such action would be consistent with existing practices under which the executive branch receives the comments of the American Bar Association and other bar groups concerning qualifications of individuals being considered for appointment to judicial posts.

PART IV

ORGANIZATION OF TRANSPORTATION LAW

CHAPTER 1. GOVERNING CONCEPTS

A considerable amount of the criticism which has been directed at the transportation regulatory process has been centered around charges of inequality, inconsistency, and delay. Usually the regulatory agency is the target of these charges. There is ample evidence, however, to support the conclusion that inconsistencies and ambiguities in the law itself, coupled with obsolete provisions carried over from an earlier and different era are, in large part, the real basis for complaint.

In this part we will summarize our concepts of the law, then discuss some of its more important inconsistencies and suggest a pattern of reconstruction that could avoid, at least in large measure, such complaint in the future.

The law is not an end in itself but it is one of many tools by which organized society approaches an objective. For this reason the format of the law should be designed to help attain the objective.

If an objective be a coordinated transportation system of all modes then the law should be drawn with that aim in mind and provisions which tend to impede attainment thereof, should be modified.

Among other objectives of government in transportation are equality and consistency of treatment of the several modes of transportation and the carriers thereof. At the same time it is obvious that not every provision of transportation law should apply equally to all modes. It follows that each provision of the law should be tested against the questions "Does it apply to transportation generally; should it; and if not, why not?"

Another objective of the law should be that it clearly expresses the intent of the lawmakers for the guidance of those who are subject to its provisions and those who must interpret, administer, and enforce it. Administrative law, however, requires a continuing exercise of discretion because it cannot, and should not, attempt to provide specifically for every contingency. It follows, therefore, that in the areas where Congress intends a specific result the law must be specific; where limited flexibility is desired, specific limits should be stated and where full exercise of discretion is to be lodged in the regulatory agency the law should state the objective and direct the administrators to attain it by such means as they deem best.

To provide guidance in the exercise of regulatory and promotional judgment Congress has established a national transportation policy. To achieve its purpose, the policy should take precedence over any specific provisions of the statutes in the event of conflict between policy provisions and provisions of the statutes. Every broad policy in so complex a field as transportation, however, is likely to require

some exceptions thereto. In such cases the fact of the exception to policy should be specifically stated.

When terms requiring exercise of judgment are used in administrative law much uncertainty and confusion resulting in excessive litigation could be avoided if the lawmakers expressed their intent and understanding of the term. In transportation law, it has proven difficult to interpret the intent of Congress regarding such phrases as "undue preference"; "compensatory"; "destructive competition"; and the like. Such terms lack precision in a modern world of rapid development. More precise explanation of the intent of Congress, modified from time to time as changing circumstances might require, would greatly simplify the regulatory problem for all concerned in the

process.

In a dynamic economy, changing conditions require that administrative law be kept up to date with the realities of the time. There never has been any deliberate intent in Congress to try to fit transportation of the day into the suit of yesteryear but failure to provide for continuing analysis of the trends which lead to change has caused us to await buildup of sufficient pressure to force action rather than the preferable practice of early adaptation of regulation to foreseeable conditions. Government regulation of competitive industry should guide, not follow, events.

Finally, if the law is to be a useful tool in attaining our national objective in transportation, every part thereof should contribute toward that end. It is obvious that we must identify the objectivejust what do we want from transportation? Are we to consider the national interest predominant or are individual interests in conflict therewith to be favored? Identification of the objective by Congress for the guidance of all concerned is an indispensable prerequisite to effective administrative law.

CHAPTER 2. INCONSISTENCIES

A. INCONSISTENCIES IN THE NATIONAL TRANSPORTATION POLICY

Inconsistencies in law, promotional activities, and regulatory decisions impede the development of transportation to its fullest potential to furnish economical service to the Nation. In this section of our report, we highlight certain of these inconsistencies as examples of the need for greater coordination in formulating and administering transportation policy.

Our national transportation policy is contained in the Interstate Commerce Act. In brief, this declaration of congressional policy provides for:

(1) The furtherance of a national transportation system by water, highways, rail, adequate for needs of U.S. commerce, postal service, and national defense.

(2) Fair and impartial regulation of all modes.

(3) The recognition and preservation of the inherent advantages of each (mode) to promote safe, adequate, economical, ef

154 Stat. 899, Sept. 18, 1940; 49 U.S.C., secs. 1, 301, 901, and 1001. In fact, the Civil Aeronautics Act and our maritime legislation contain national policy on transportation also. The national transportation policy contained in the Interstate Commerce Act is made applicable to that act specifically.

ficient service and foster sound, economic conditions among the several carriers.

(4) Reasonable charges for transportation services.

(5) The prohibition of any unjust discrimination, undue preferences or advantages, or unfair or destructive competitive practices.

(6) Cooperation with States and their officials.

(7) The encouragement of fair wages and equitable working conditions.

This act goes on to state that "all of the provisions of this Act shall be administered and enforced with a view to carrying out the above declaration of policy."

However, this is not all. Other ingredients of our national policy have been inserted into the act, as follows: 2

(8) To promote and develop water transportation, service, and facilities and to foster in full vigor both rail and water transportation.

(9) Export rates on wheat and cotton and other commodities are to be granted on the same principles as applicable to industrial products for export.*

(10) In adjusting freight rates conditions which at any time prevail in our several industries should be considered insofar as it is legally possible, so commodities may freely move. The Interstate Commerce Commission (ICC) is to investigate rates and charges to determine whether they are unjustly discriminatory, unduly preferential, imposing undue burdens, or giving undue advantage as between the various localities and parts of the country. The ICC shall give due regard, among other factors, to the general and comparative levels in market value of the various classes."

(11) It is in aid of the national transportation policy of the Congress, in order to promote the public interest in avoiding the deterioration of service and the interruption of employment which inevitably attend the threat of financial difficulties and which follow upon financial collapse and in order to promote the public interest in increased stability of values of railroad securities with resulting greater confidence therein of investors, to assure, insofar as possible, continuity of sound financial condition of common carriers subject to part I of said Act, to enhance the marketability of railroad securities impaired by large and continuing accumulations of interest in income bonds and dividends on preferred stock and to enable said common carriers, insofar as possible, to avoid prospective financial difficulties, inability to meet debts as they mature, and insolvency.

(12) In the exercise of its power to prescribe just and reasonable rates the Commission shall give due consideration, among

In a sense, all statutory provisions are part of the national policy. The provisions herein mentioned as such are those which the Congress has so identified. Some provisions are of broad application, others are more circumscribed.

41 Stat. 499, sec. 500, Feb. 28, 1920, 49 U.S.C., sec. 142.

454 Stat. 902, Sept. 18, 1940; pt. I, sec. 3(1a) Interstate Commerce Act.

43 Stat. 801, Jan. 30, 1925; 49 U.S.C., sec. 55 [Hoch-Smith resolution].

71 Stat. 369-370, Aug. 16, 1957; 49 U.S.C., sec. 20b; pt. I, sec. 20b, Interstate Commerce Act.