ECONOMIC RESEARCH AND STATISTICS

The Commission reviews, consolidates, and publishes financial, operating, and traffic data obtained from annual, periodic, and other reports of carriers subject to its jurisdiction. Such data, as well as economic studies and special analyses prepared primarily for use of the Commission in carrying out its regulatory responsibilities, are also of interest and value to the Congress, other agencies of Government, the transportation industry, shippers and receivers, labor, and others.

REPORTING AND STATISTICS

During the year, a total of 67,325 reports, including 17,865 annual, 41,695 quarterly and monthly reports, and 7,765 railroad accident reports were examined and processed by the Bureau of Transport Economics and Statistics. In addition, railroads filed 22,675 supplemental reports of individual train and train-service accidents. This volume was approximately the same as that reported last year.

In cooperation with the transportation industry and the House Subcommittee on Census and Government Statistics of the Post Office and Civil Service Committee, efforts were continued to eliminate outmoded reporting requirements, procedures, and techniques, and to make changes necessary to reflect developments in the various modes of transportation subject to Commission regulation. At the close of the fiscal year, consideration was being given to changing the frequency of certain class I railroad reports from a monthly to a quarterly basis. Also under consideration was the simplification of annual report forms prescribed for class III motor carriers of property and classes II and III motor carriers of passengers with the objective of reducing the information required to essential items. Annual report forms prescribed for railroad owned or controlled car lines were revised, effective January 1, 1960, and new reporting requirements and simplified forms were prescribed for private car lines owning 10 or more cars which are not railroad owned or controlled. The filing of quarterly report forms by private car lines was eliminated, also effective January 1, 1960. Improvements also were made in other report forms, and it is expected that progress in this direction will continue.

The publication of summary statistics of financial and operating data continued on schedule. The demand for publications of this

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nature continued to grow as did the number of requests for information taken directly from individual carrier reports.

The Bureau of Transport Economics and Statistics participated in meetings with representatives of railroad industry, labor, and the Railroad Retirement Board to consider the need and appropriate procedure for revising the railroad accident reporting rules.

The regular series of publications prepared from the 1 percent sample of audited railroad waybills was continued. Demand and uses for these sample data on traffic flows, rate structures, revenues, and other characteristics of railroad freight movements became more widespread. For example, regular state-to-state and other distributions and tabulations were specially prepared for the Office of Civil and Defense Mobilization and provided key information in that agency's study of the effects of nuclear attacks on the railroad transportation system.

Emphasis was also given to the improvement of waybill reporting and processing techniques and procedures. Visits to accounting offices of railroads were continued for the purpose of discussing and resolving reporting problems in the interest of improving the accuracy of the sample. These discussions frequently led to savings for the respondents as well as for the Commission. Considerable progress was also made in the program to determine, by electronic computer, short-line mileages, used as the distance factor for the sample. The percentage of waybill receipts "miled mechanically" increased from 24 percent at the beginning of the fiscal year to an estimated 32 percent in June 1960. This will increase to about 46 percent early in the fiscal year 1961 upon completion of certain preparatory processing begun late in the fiscal year.

ECONOMIC RESEARCH AND ANALYSIS

The work of the economic research staff continued to be devoted in greater part to the development, analysis, and interpretation of data. pertaining to problems currently before or of immediate concern to the Commission. This work included investigations of economic aspects. of special situations including legislative proposals and civil defense mobilization matters, implications of rate proposals, and the preparation of comprehensive background information concerning economic developments in particular segments of the transportation industry. The Commission supplied economic data for the use of congressional committees in staff studies of transportation problems. At the close of the year the staff was providing advisory services and statistical information to the National Academy of Sciences in its overall study of the transportation industry. The Academy also requested Com

mission representation at its study session to be held at Woods Hole, Mass., in August of the coming year.

In addition to meeting the demand for research services of the type illustrated above, further progress was made in the preparation of basic studies. "Value of Service in Rate-Making," Bureau of Transport Economics and Statistics Statement No. 5912, was released during the year. The study, based principally on analyses of Commission decisions, is an examination of the role of value of service in the development of the rate structure and its present influence in the construction of rates. In June, the Commission released "Jurisdictional Conflicts and the Coordination of Transportation," Statement No. 606. It points to legislative inconsistencies as an important source of conflicts in regulatory jurisdiction which impede the development of coordination among the various modes of transportation. The demand for each of these studies soon exhausted original supplies and arrangements were made for the reproduction of additional copies by the Government Printing Office and for sale through the U.S. Superintendent of Documents. A report on "Gray Area of Transportation Operations," Statement No. 6010, was made available to a congressional committee in June. The study deals with transportation operations of questionable legality lying between legitimate private transportation and authorized or exempt common carriage. It will be reproduced and sold to the public through the facilities of the Government Printing Office. The research staff also completed a study of "Fluctuations in Railroad Freight Traffic Compared with Production, Class I Railroads, 1955, 1956, 1957," the twelfth in a series, which has met important regulatory needs of the Commission as well as a large public demand for this information.

ENFORCEMENT AND COMPLIANCE

During the year, 718 criminal and civil enforcement cases were concluded in the courts, with fines and forfeitures amounting to $691,431.00. The Bureau of Inquiry and Compliance instituted or took part in 1,294 investigations. Investigations related to motorcarrier enforcement were mostly conducted by field personnel of the Bureau of Motor Carriers, and investigations and court proceedings related to the railroad safety laws were handled by the Bureau of Safety and Service.

RAIL, WATER, AND FORWARDER ENFORCEMENT Enforcement of the penal provisions of parts I, III, and IV of the Interstate Commerce Act and of related statutes, except for safety, is the function of the Section of Rail, Water and Forwarder Enforcement of the Bureau of Inquiry and Compliance. The related statutes include the Elkins Act, portions of the Clayton Antitrust Act, and the Transportation of Explosives and Other Dangerous Articles Act. In addition, this section participates in proceedings before the Commission which may involve administrative enforcement, interpretation, adjudication or rulemaking.

The staff of special agents of the bureau conducted about 300 investigations of both carrier and shipper offenses involving violations of the act and related statutes. Criminal informations, complaints, and indictments were filed against 60 defendants for various violations, and fines totaling $75,325 were imposed in the 44 Federal court cases completed.

Improper application of transit rates and privileges again played an important role in the enforcement program. Six shipper defendants were successfully prosecuted under the Elkins Act for soliciting and receiving concessions through the device of manipulation of transit billing whereby transit privileges and rates were applied wrongfully to a carload shipment of property not entitled to such privileges and rates. The U.S. Court of Appeals for the Sixth Circuit affirmed an earlier conviction and sentence of a shipper of lumber for similar transit practices resulting in the solicitation and receipt of concessions. (Emerald Lumber Co. v. United States, decided June 3, 1960.) That case was of particular interest in restating the principle announced 20 years previously in Boone v. United States (CA 6, 1940),

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109 F. (2d) 560, that "it is unlawful to substitute or forward under the transit rate any commodity that does not move into the transit point at such rate." In the field of transit enforcement, the Commission also instituted an investigation on its own motion into certain lumber transit tariffs and practices in the South in which the Bureau. of Inquiry and Compliance was directed to appear, offer evidence, and make representations on the issues involved. The respondent railroads, however, amended their lumber transit tariffs, particularly with respect to the items pertaining to preservation of identity of transit commodities and substitution, thus eliminating the need for the general investigation. The proceeding, therefore, was discontinued. Five cases involving false billing by shippers whereby they obtained transportation of commodities at less than applicable tariff rates were concluded and resulted in substantial fines, and in prison sentences against two individuals. One of the sentences was suspended, while the other was ordered to run concurrently with sentence in connection with other offenses.

Other prosecutions concluded involved the unauthorized acquisition of control of one railroad by another, unlawful issuance of securities, and prosecution of a water carrier for soliciting and receiving concessions through improper combination of barges to protect a 500-ton minimum rate, and by failing to assess demurrage charges. A large eastern railroad was prosecuted for granting concessions by delay in issuance of constructive placement notices. Two defendants were convicted of falsification of railroad records. Twenty-one defendants were adjudged guilty of violation of the regulations prescribed by the Commission governing the transportation of explosives and other dangerous articles.

The 1959 Annual Report noted the pendency before the Supreme Court of a lower court order granting a permanent injunction against a large western railroad for permitting deliberate detention of lumber shipments en route and refusing to file a tariff covering such service. Attorneys from the Section of Rail, Water and Forwarder Enforcement provided advisory services and assistance pertaining to the appeal as requested by the Department of Justice, and the case for the Government was presented to the Supreme Court by Department of Justice counsel. The Supreme Court affirmed the lower court's action, pointing out that to permit shippers to use freight cars as a place of storage while the shipper seeks a market for the cargo constitutes the furnishing of additional "privileges or facilities" under section 6(7) of the act and must be published and filed in the carrier's tariff.

Closely related to the above problem was the Commission's suspension and investigation of proposed tariff rules permitting delayed