tinuously receives detailed operating and economic data from the railroads and, thereby, is in a peculiarly advantageous position to evaluate efficiently and expeditiously, and at minimum cost, the current financial condition and needs of individual railroads. We feel that our administration of part V has been efficient and in the public interest.

In these circumstances, we believe that the question as to whether part V should be repealed and our functions thereunder transferred to the Department of Commerce, or other executive agency, is a matter which should be reserved for determination by the Congress on the basis of broad policy considerations. This, of course, assumes that the present statutory expiration date of part V is to be extended beyond June 30, 1963.

We suggest that if sections 10, 11, and 12 are favorably considered, certain modifications are necessary in order to eliminate ambiguities and voids appearing in subsections (f), (g) (1), and (j) of section 10 as presently worded. For convenience, these suggested modifications are set forth in an appendix attached hereto.

Finally, and with reference to the bill as a whole, we observe that in the absence of a specified expiration date, its provisions would take effect on the date of enactment. This, we feel, would create a number of problems. For example, if section 3 is enacted, it is possible that some of the tariffs of the affected carriers which are in effect on the date of enactment would not be in full compliance with the provisions of the section. These carriers would need at least 45 to 60 days within which to bring their tariffs in line with the new requirements. Furthermore, with respect to section 4, if enacted, sufficient time, not less than 180 days, should be allowed to establish any necessary regulations such as the form and manner of publishing and filing tariffs pursuant thereto. Finally, in connection with section 12(a) concerning the transfer to the Department of certain Commission personnel and property, the Bureau of the Budget would need some time within which to determine which employees and what property should be transferred. We recommend, therefore, if these provisions are favorably considered, that the bill be amended so as to provide that the aforementioned sections shall not become effective until the expiration of 180 days after enactment.

Except as otherwise noted, we recommend enactment of S. 1062.

We trust that you will find the views expressed in this letter helpful in your study and analysis of our transportation system.

Sincerely yours,

LAURENCE K. WALRATH, Chairman.

APPENDIX

SUGGESTED MODIFICATION OF SECTION 10 of S. 1062

Section 505 of the Interstate Commerce Act provides, in effect, that the Commission may consent to the modification of the provisions of any guaranty into which it had entered if it determines that it would be equitable to do so. Subsection (f) of section 10 of the bill would grant similar authority to the Secretary of Commerce with respect to any guanantee into which he had entered. No such authority would be granted to the Secretary, however, with respect to guarantees entered into by the Commission. Only by implication could it be said that section 11 (a) would remedy this defect.

Section 506(a) of part V provides that payments required to be made as a consequence of any guarantee by the Commission shall be made by the Secretary of the Treasury. Under subsection (g) (1), the Secretary of the Treasury would be authorized to make whatever payments that may become necessary as a consequence of any guarantee made by the Secretary of Commerce, but no provision is made for payments occasioned by guarantees which had been made by the Commission under part V, which the bill would repeal. Finally, under subsertion (j) the authority granted to the Secretary under section 10 would expire on June 30, 1963, except as to pending applications and as to guarantees already made by the Secretary. Although some of the obligations guaranteed by the Commission will not mature until 1975 or 1976, subsection (j) even though part V would be repealed, contains no comparable provision respecting guarantees which have been made by the Commission.

In order to avoid any doubt as to the status of obligations heretofore guaranteed by the Commission under part V, we recommend that the provisions of subsections (f), (g) (1), and (j) be amended to embrace such obligations. In this

onnection section 10 should also be amended to specifically provide that the Secetary shall be responsible for the continued administration of loans guaranteed y the Commission.

Two other problems would be raised by enactment of section 10 as presently worded. Subsection (d) would empower the Secretary to make guarantees “after onsultation with and consideration of the views and recommendations of the Commission." This provision is indefinite in that it does not set up any standards r guiding principles to be followed by the Commission in expressing its "views nd recommendations" to the Secretary. Good administration would seem to equire that the Commission's duties and responsibilities in this connection be et forth in some detail. Comparable duties and responsibilities of the Commision were described in detail in the Transportation Act of 1920 and the Recontruction Finance Corporation Act.

A very serious question is raised by the fact that section 10 does not indicate hether the issuance of railroad securities guaranteed by the Secretary would ave to be authorized by the Commission under section 20a of the Interstate Commerce Act. Any such securities now issued without such authorization are oid. It is of utmost importance, therefore, that it be made clear whether the suance of securities of a railroad guaranteed by the Secretary would have o be authorized by the Commission under section 20a.

Section 11 of S. 1062 deals with various matters incidental to the proposed ransfer of loan guarantee authority. Subsection (a) provides that all orders, pprovals, permissions, agreements, and regulations, among other things, issued, ade, granted, or allowed by the Commission under part V and in effect at the me the Commission's functions thereunder are vested in the Secretary shall ontinue in effect according to their terms until modified, terminated, superseded, et aside, or repealed by the Secretary, by a court, or by operation of law. At resent there is no provision in part V authorizing the Commission unilaterally o terminate or set aside the loan guarantee agreements into which it has entered. ection 11(a) would, however, by its terms, appear to authorize the Secretary to erminate or set aside any guarantee agreement which has been approved and atered into by the Commission under part V. It would seem obvious that this not the intent of the bill and we therefore recommend, if the provisions of ection 11(a) are favorably considered, that they be clarified in this respect. Section 11(b) provides that the provisions of section 11 of the bill shall not fect any "proceedings pending" before the Commission at the time such section kes effect; but any such proceedings shall be continued before the Secretary of ommerce, orders issued therein and payments made pursuant to such orders, as section 10 had not been enacted; and orders issued in any such proceedings all continue in effect until modified, terminated, superseded, or repealed by the ecretary of Commerce or by operation of law. The meaning of this section is ot entirely clear. Perhaps, it is intended that "proceedings pending" embrace l cases in which guarantees have been made, but this would, in our opinion, quire an unnatural construction. We consider that a proceeding is closed although, of course, subject to reopening) when a guarantee has been approved ad a guarantee agreement has been executed and delivered. The language this section should be revised so as to eliminate the ambiguity.

Based on 1961 carload, truckload, or oil-pipeline traffic, excluding forwarder traffic.
Commodity classes 1-13, inclusive.

Commodity classes listed in notes 4 and 5 below.

Commodity classes 49-69, inclusive; 77-89, inclusive; and 243.

Commodity classes 23-37, inclusive; class Nos. 43, 71, 75, 91, 93, 97, 101, 105, and 199; Nos. 201-218, inclusive; Nos. 223-227, inclusive; 233-237, inclusive; No. 299; and Nos. 401, 403, 409, and 49%.

• Commodity classes 337 and 501-507, inclusive.