RAILROAD CONSOLIDATION HOUSE OF REPRESENTATIVES, COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, The committee met at 10 o'clock a. m., Hon. James S. Parker (chairman) presiding. The CHAIRMAN. The committee will please come to order. We have under consideration H. R. 11212 which reads as follows: [H. R. 11212, Sixty-ninth Congress, first session] A BILL To promote the unification of carriers engaged in interstate commerce, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the interstate commerce act, as amended, is amended (1) By inserting after the enacting clause thereof the following heading: "TITLE I.-REGULATION OF CARRIERS" (2) By adding at the end of such act a new title to read as follows: "TITLE II.-UNIFICATION OF CARRIERS "SEC. 201. As used in this title "DEFINITIONS "(1) The term 'interstate or foreign commerce' means commerce between any State, Territory, or possession, or the District of Columbia, and any place outside thereof; or between points within the same State, Territory, or possession or the District of Columbia, but through any place outside thereof; or within any Territory or possession or the District of Columbia. "(2) The term 'carrier' means 66 (a) A common carrier engaged in the transportation in interstate or foreign commerce of passengers or property wholly by railroad or partly by railroad and partly by water, within the continental United States, subject to Title I of this act, including sleeping-car companies and express companies; (b) A corporation having power to engage, or owning property used or held for use, in such transportation. "(3) The term 'securities' includes shares, bonds, or other evidences of interest or indebtedness. "(4) The term 'voting securities' include all outstanding shares of capital stock (whether or not such shares have voting privileges), and includes all other outstanding securities the holders of which under the terms of a mortgage deed of trust or other contract have the right to vote upon the question to be determined. "DECLARATION OF POLICY "SEC. 202. It is hereby declared to be the policy of Congress, in order that an adequate and efficient transportation service may be maintained in the United States and necessary weak and short lines be preserved, to authorize and encourage the unification, through any method specified in sections 203, 204, and 205 of this title, of the property of carriers into a number of strong and efficient and well balanced systems which will, as far as practicable, maintain 1 the existing routes and channels of trade and commerce, and preserve, as between themselves, the advantages of effective competition in service, so that the properties of the carriers in each system shall ultimately be managed and operated and owned or controlled by a single corporation, economy be promoted, unnecessary duplications and wasteful competition eliminated, better service afforded, and the traffic moved at the lowest rates compatible with the maintenance of adequate and efficient transportation service. In order that this policy may be carried out, the unification of the properties of carriers, directly or indirectly, otherwise than in accordance with the provisions of this title, after the enactment of the railroad consolidation act of 1926, shall be unlawful. "UNIFICATION UNDER AUTHORITY OF THIS TITLE "SEC. 203. (1) In order to bring about such unification, two or more carriers shall have power to agree on a plan therefor to be carried out under the authority of this title. (2) The plan may provide for one or more of the following: "(a) An acquisition by or transfer to one of the petitioning carriers or another corporation (by purchase, sale, exchange, lease, or otherwise) of all or a part, or the right to operate all or a part, of the properties and franchises of one or more carriers, and if so desired, the disposition of all or a part of the remaining assets of any of such carriers. (b) A corporate merger or consolidation of two or more carriers into one of the petitioning carrier or any other carrier corporation. "(c) An acquisition of securities (by purchase, sale, exchange, lease, or otherwise) issued by a carrier, if such acquisition is proposed to be made as part of a plan to effect a unification under subdivision (a) or (b) of this paragraph. "PROCEDURE "SEC. 204. (1) Two or more carriers may petition the commission for the approval of a plan to be carried out under the authority of this title if the boards of directors of such carriers have entered into a joint agreement, under their respective corporate seals, proposing such plan. The petition shall set out the plan in such detail as the commission may require. “(2) Such joint agreement shall set out— "(a) The terms and conditions of the plan and the methods by which it is to be effected. "(b) A statement of the financial plan and of the securities, if any, to be authorized and to be issued in carrying out such plan, the substantial rights, privileges, powers, and immunities granted or denied the holders of one class of shares that are not equally granted or denied the holders of any other class of shares, and the terms on which such securities are to be issued. "(c) Such other provisions and details not inconsistent with this act as the board of directors may deem necessary or appropriate, or as the commission may require. (3) Any such joint agreement shall be held to be entered into by the board of directors of any such carrier if a majority of the number of such directors in office vote therefor. "(4) A copy of the joint agreement, entered into in accordance with the provisions of this section, shall be filed as a part of the petition. "ACQUISITION OF SECURITIES BY A CARRIER "SEC. 205. Any carrier, in order to bring about a unification through the securing of control by the acquisition of securities, in accordance with the policy declared in section 202, may petition the commission for the approval of a plan to be effected by the acquisition by such carrier of securities issued by any other carrier or carriers, if such plan has been adopted by the board of directors of the petitioning carrier. Such petition shall set out the plan, including the terms, methods, and purpose of the proposed acquisition and the issue of any new securities that may be involved therein, in such detail as the commission may require. "NOTICE AND HEARING "SEC. 206. (1) The commission shall give reasonable notice of the time and place for a public hearing to each of the carriers filing, or joining in the filing of, a petition under this title, and to the governor of each State in which is located |