EXHIBIT 5

OCTOBER 1, 1969.

Hon. JOHN A. VOLPE,

Department of Transportation,

Washington, D.C.

DEAR MR. SECRETARY: Recently, the Penn Central Railroad announced a plan to "restructure" commuter and other fares on its New Haven Division. As you well know, the Penn Central's New Haven Division is a vital commuter and passenger line for all of New England. An unreasonable fare increase, if allowed to go into effect, will seriously deter commuter use of this line.

Commuters must use this line. They have no other practical choice. But this must not mean that they should be exploited by large fare increases and poor service. Unfortunately, commuters lack the time and resources necessary to refute the arguments presented by the Penn Central's well-financed legal staff.

At the hearing I conducted on President Nixon's reorganization plan for the Interstate Commerce Commission, I was informed that your Department_has, in the past, intervened before the ICC on behalf of the public in rate cases. I ask for such intervention on behalf of New Haven commuters. Commission representatives testified they would welcome such particiption on your part.

DEAR SENATOR JAVITS: At the recent hearings before the Government Operations subcommittee I was asked to advise you as to whether the Interstate Commerce Commission, in approving a railroad passenger fare increase, can require the railroad to segregate a portion of the increase for the purchase or maintenance of passenger equipment or the improvement of the quality of the passenger service. In my opinion, the Commission does not have such authority. Both a decision of the Supreme Court and the recent "Adequacies" case decided by the Commission hold that the Commission does not have jurisdiction to direct the railroads to purchase new or maintain present equipment unrelated to safety requirements. By requiring railroads to provide a certain percentage of a fare increase for such use, the Commission would be attempting to accomplish indirectly what it cannot do directly.

In United States v. Pennsylvania R.R. Co., 242 U.S. 208 (1916), the Supreme Court held that the Commission did not have the power to require railroads to provide and furnish railroad cars. The court cited an early decision of the Commission to show the general law in this area:

"A power (to order the purchase of new cars) so extraordinary and so vital, reached by construction, could not justly rest upon any less foundation than that of direct expression or necessary implication and we find neither of these in the statute."

The Pennsylvania R.R. Co. case was cited with approval by the Commission in the Adequacies case. Adequacies Passenger Service-Southern Pacific Co., 335 I.C.C. 415, 423, (decided September 12, 1969). The Commission there held that it did not have jurisdiction to pass upon the adequacy of passenger train service. Id. at 437. Both the majority and dissenting opinions agreed that the Commission does not have jurisdiction to order the purchase of new equipment by the railroads. The majority extended this prohibition of jurisdiction to the maintenance of equipment, as well.

If I can be of further assistance, I should be pleased to oblige.

Sincerely yours,

FRITZ R. KAHN, Acting General Counsel.

EXHIBIT 7

STATEMENT OF WALTER R. McDONALD, MEMBER, GEORGIA PUBLIC SERVICE COMMISSION

My name is Walter R. McDonald and I am a member of the Georgia Public Service Commission, an office I have held for over forty years. I am also President of the Southeastern Association of Railroad and Utilities Commissioners, a position which I have held since 1937; past President of the National Association of Regulatory Utility Commissioners and a member of its Executive Committee. While I am appearing here today on my own behalf, I am confident that I express the feelings of the overwhelming majority of those working in the field of railroad and motor carrier regulation.

My testimony today is directed entirely to President Nixon's Reorganization Plan Number One-a plan which, if permitted to become effective, would transfer the executive and administrative powers of the Commission to the Chairman of the Commission, and would invest the President with the Power to designate the Chairman from among members of the Commission. In my opinion, the proposal set forth in Reorganization Plan Number One represents an extraordinarily serious threat to the independence of the Commission, since the proposal would render the Commission subject to continuing political interference and pressure from the most powerful political agency in the United States.

In the first place, it is my judgment that the reasons cited by the President in support of this so-called Reorganization do not even begin to justify its inherent incursion upon the Commission's political neutrality in the exercise of its quasilegislative and quasi-judicial responsibilities. The reasons offered by the Presidential message accompanying the Reorganization Plan are that the Commission as now organized is hampered by both lack of continuity and lack of leadership. These disabilities, according to the President's message, are due to the fact that the Chairman serves only a year at a time, and the further fact that the Commission does not have vested in him by law the executive and administrative functions of the Commission, so that there is no clear responsibility for the management of the Commission's day-to-day affairs.

As to the alleged lack of continuity-I do not believe there has been any such lack; but if it exists, I fail to see how it could have been produced by the Commission's practice of rotating the Chairmanship, or how it could be cured by the President's proposal. In fact, it seems to me that the exact reverse is closer to the truththat the annual rotation contributes to continuity, since it means that the Chairman is always a Commissioner with experience and seniority, to whom the problems of the Commission are nothing novel; and it further assures that most of the Commissioners would receive some close hand experience with the Commission's administrative burdens and responsibilities. The Commission tried a non-rotating Chairmanship system during its early years, from 1887 to 1910; and it later reported to the President and Congress that "the results of experience of twentythree years with this policy left no doubt in the minds of the then members of the Commission that the policy of annual rotation in the office, while possessing disadvantages, was better than that of the permanent Chairmanship, which had developed more serious drawbacks." Transportatin legislation, 74th Cong., 1st Sess., House Doc. Number 89, (January 21, 1935), at Page 8. The President's current proposal would introduce far more serious discontinuities than those which may have been produced by the annual rotation, since regular and systematic succession to the office would be replaced by an irregular succession dependent entirely upon the President's pleasure.

The other reason cited as support for the Reorganization Plan-the supposed lack of leadership-has even less merit. The Chairman already possesses the administrative powers of the Commission, by delegation of the Commission. Embodiment of this arrangement in a statute or Presidential Reorganziation Plan thus serves no useful purpose-especially since under the proposed plan the Chairman's exercise of these powers is expressly made subject to the "general policies" of the whole Commission. His appointment of the administrative heads would be made "subject to the approval of the Commission." Also the plan reserves to the whole Commission the matter of requests for, and distribution of, appropriated funds. Thus, under the President's plan the whole Commission would remain ultimately responsible, as it is today, for its major executive and administrative functions.

Careful scrutiny of the reasons which have been offered by the President suggests to me that the real purpose of the proposed Reorganization is not the enhance

ment of leadership for administrative efficiency within the Commission. Continuity of leadership could certainly be achieved as well by returning to the pre-1910 practice wherein the Commissioners selected a Chairman from among their own numbers to serve for a period of years; and such a semi-permanent Chairman could be vested by statutes with broad executive and administrative powers. The President has chosen instead to seek authority to designate the Chairman-which is a much more far-reaching measure than would be necessary to insure centralized and continuous leadership, since it goes not to the question of the Chairman's power and responsibilities within the Commission, but rather to the question of the President's power over the Chairman and the other Commissioners.

In short, the stated reasons for the Presidential Reorganization simply do not make sense. It may be that the President or his advisors have other reasons in mind. If so, they should be aired publicly.

In my judgment the major effect of permitting this plan to become effective would be to subvert the Commission's traditional independence and subject it to external political pressures from the executive branch. Far more is at stake than simply the selection of a Chairman for a fixed term. Dwight A. Ink, Assistant Director for Executive Management for the Bureau of the Budget and the Administration spokesman before the House Subcommittee considering the plan, testified that the Administration intended the plan to mean that the appointed Chairman would serve "at the pleasure of the President." He explained that the President could request a resignation of the Chairman whenever he saw fit to do so. This authority to terminate the tenure of the Chairman could be used not only to punish and replace an independent Chairman believed to be insufficiently responsive to the wishes of the White House; but it might also be used-probably with even greater effectiveness-to exert continuing pressure on a pliable Chairman or his more ambitious colleagues, and thereby to prejudice the outcome of important cases before the Commission.

I believe there is a serious question as to whether the President's Reorganization Plan, as interpreted by the Administration spokesman, Mr. Ink, is constitutionally valid. In Humphreys Executor vs. United States, 295 U.S. 602 1935, the Supreme Court was confronted by the Presidential removal of a member of the Federal Trade Commission. In construing the extent of Presidential power, the Court used language and logic which seemed to me squarely to preclude the removal of a Commissioner from the position of Commission Chairman:

"We think it plain under the Constitution that illimitable power of removal is not possessed by the President in respect of officers of the character of those just named (including members of the Interstate Commerce Commission). . . . For it is quite evident that one who holds his office only during the pleasure of another cannot be depended upon to maintain an attitude of independence against the latter's will.

The fundamental necessity of maintaining each of the three general departments of government entirely free from the control or coercive influence, direct or indirect, of either of the others, has often been stressed and is hardly open to serious question. So much is implied in the very fact of the separation of the powers of these departments by the Constitution, and in the rule which recognizes their essential co-equality. The sound application of a principle that makes one master in his own house precludes him from imposing his control in the house of another who is master there.

The power of removal here claimed for the President falls within this principle since its coercive influence threatens the independence of a Commission, which is not only wholly disconnected from the executive department, but which, as already fully appears, was created by Congress as a means of carrying into operation legislative and judicial powers, and as an agency of the legislative and judicial departments."

I understand the Administration's point that a Chairman who might be removed by the President would remain on the Commission until the end of his term as a Commissioner. However, I believe that the continuous threat of being replaced as Chairman would itself vitiate the independence of the Chairman in the same way that the possibility of removal from the Commission was found by the Supreme Court to threaten the independence of its members. This power of appointment and removal of the Chairman at will would thus serve as a doubleedged Presidential political sword since it could be used not only to keep the Chairman sensitive and responsive to the President's wishes, but also as an incentive to cooperate for other Commissioners who might be ambitious to attain the Chairmanship.

But whether or not the Reorganization Plan is constitutional, it would clearly open up the Commission to exactly the kind of political pressures which ought not to be injected into its considerations. Congress recognized the need for independence from politics when it provided that no more than six Commissioners could be appointed from the same political party, so that the Commission would not be of a partisan character. The entire history of the Act demonstrates clearly that Congress intended to create a body of experts who would exercise their technical knowledge and expertise in the regulation of interstate carriers free of political interference. The Commision itself has often referred to the necessity for remaining aloof from partisan politics. As one of the great Chairman, Commissioner Eastman, once observed:

"Whatever the faults of the Commission may have been and there have been many, it has never, I believe, been accused of any lack of integrity, and it has kept its skirts clean of politics. Personally I think that the Commission is in need of some measure of reorganization, if it is to be given larger duties (in connection, for example, with water carriers and airlines), but I sincerely hope that in no reorganization that may be undertaken will anything be done that will impair the essential nature of the institution, give it the slightest political tinge, or endanger the characteristics which have distinguished it during the past half century."

(Address before the Boston Chamber of Commerce, January 21 1937)

On another occasion, Commissioner Eastman referred to his hope that the Commission's powers would "be exercised in the coldest neutrality." This proposed reorganization would make it next to impossible to maintain any such "cold neutrality." In fact, it would guarantee access by Administration aides to the most important Commission deliberations.

Of course, it is theoretically possible that such access would never be taken advantage of by the President. I do not believe, however, that given our experience in recent generations with the growth of Presidential power and influence, we can afford to rely on any such purely theoretical possibility. The President is the focal point of tremendous political pressures from all over the country applied by private groups with great interests at stake. These private interests abound in the transportation industry. It is simply inconceivable to me that these groups would not seek to gain the assistance of the President and his staff in advancing their position within the Commission. And it is equally unlikely that the executive branch could remain perpetually unresponsive to all such appeals, whether or not the President himself became personally involved. During the Eisenhower years, for example, the Assistant to the President, Mr. Sherman Adams, met periodically with various Commission Chairmen. Mr. L. W. Koenig, in his book The Invisible Presidency (1960), pages 391-399, described these meetings as concerned with "policy and personnel" and observed that Adams "didn't just engage in chit chat at these sessions; the evidence is indisputable that he intervened rather positively in the affairs of the Commission on at least several occasions." The potentiality for exactly this sort of executive intervention is inherent in the President's Reorganization Plan Number One.

Proposals for reorganization of the ICC have been urged before, and some of them have made some sense. The late Herbert Hoover, Chairman of the Presidential Commission on Organization of the Executive Branch of the Government, used to argue that the executive functions of the ICC and the other regulatory agencies should be turned over to the executive branch where they properly belonged. As a result of this kind of thinking, the Department of Transportation was founded and many of the executive functions of the ICC were transferred to it. No longer is the President an outsider in the matter of setting and implementing a national transportation policy. The only question now is whether partisan politics, which does have its place in the executive branch of government, should be permitted to infiltrate the quasi-legislative and quasi-judicial functions of the Commission.

My firm belief, based on over forty years of experience in the field of regulatory work, is that the Commission's independence must be preserved. There is no more room for partisan politics in our regulatory commissions than there is in the highest courts of our Nation. Just as confidence in the judicial system is seriously undermined by the appearance of political influence in our judicial tribunals, so also confidence in our regulatory system will be undercut if it appears that Commission decisions can be influenced as much by partisan considerations as by the public interest in a vigorous transportation system. I strongly believe in Commissioner Eastman's principle that the Commission should exercise its powers in an atmosphere of "the coldest neutrality."

Commissioner Eastman, by the way, was one of those who served as Chairman under the annual rotation system, as did another great Chairman, Commissioner Aitchison. It would be inappropriate for me to list for you the many other great Americans, several of whom are still active, who have provided extremely able leadership for the Commission, both as its members and as its Chairmen, and who have made their contribution without the dubious advantage of continuing Presidential supervision. Anyone who has followed the Commission's activities or who knows its history will tell you that it has suffered from no dearth of continuous leadership or of administrative ability. Quite the contrary, over its long history this Commission had compiled what is probably the best record of any regulatory agency in the world.

For these reasons, I urge that Congress defeat this proposed Reorganization and guarantee to the Commission the continued independence it needs if it is to satisfy the congressional mandate, as expressed in the National Transportation Policy, "to provide for fair and impartial regulation of all modes of transportation subject to the Interstate Commerce Act."

EXHIBIT 8

JOINT STATEMENT ON BEHALF OF PROPERTY OWNERS' COMMITTEE, THE COAL TRAFFIC BUREAU OF NORTHERN WEST VIRGINIA, OHIO AND WESTERN PENNSYLVANIA, MID-WEST COAL PRODUCERS INSTITUTE, INC.

Property Owners' Committee is a voluntary association of coal mine operators and land owners with properties located in southern West Virginia, southwest Virginia and southeastern Kentucky.

The Coal Traffic Bureau is a voluntary association of coal mine operators with mines located in Ohio, northern West Virginia and western Pennsylvania. The members of the Property Owners' Committee and of The Coal Traffic Bureau encompass practically the entire Appalachian coal field.

The Mid-West Coal Institute, Inc. is a voluntary association of coal mine operators with properties in Illinois, Indiana and western Kentucky, comprising the midwest field.

The Appalachian and midwest coal interests have been represented in transportation matters for over forty years by these three organizations. Mines in these fields produce 85% of all the bituminous coal mined in the United States. Most of this coal moves by modes of transportation subject to regulation by the Interstate Commerce Commission, and, in the case of the railroads, constitutes over 20% of their entire traffic volume. We have participated in literally hundreds of proceedings before that Commission. Thus, we have a vital interest in the Interstate Commerce Commission.

We strongly oppose the appointment by the President of the Chairman of the Interstate Commerce Commission.

The Interstate Commerce Commission, since its earliest days, has been an arm of the Congress and has successfully operated as an agency entirely independent from the Executive branch.

The Commission was established to protect the interests of the shippers, both large and small, located throughout the entire United States. The shipping public is not as well organized as the regulated carriers and does not have the skilled spokesmen having access to the Executive branch. However, members of the shipping public may readily communicate directly with members of the Congress and Senate relative to the operation of the Commission. Therefore, it is not surprising that it is the regulated carriers that are most strongly supporting Reorganization Plan No. 1 and that the major opposition is from the shipping public.1 Adoption of Reorganization Plan No. 1 would result in the Interstate Commerce Commission, a quasi legislative and judicial agency of Congress, being under the dual control of the Legislative and Executive branches, an untenable situation. As the Great Architect of Living observed:

"No man can serve two masters: for either he will hate the one, and love the other; or else he will hold to the one, and despise the other." (Matthew 6-24) As the Supreme Court stated in HUMPHREY v. UNITED STATES, 295 U.S. 602 at 629-30:

"The fundamental necessity of maintaining each of the three general departments of government entirely free from the control or coercive influence, direct or indirect, of either of the others, has often been stressed and is hardly open to serious

Attached is copy of the editorial appearing in the Sept. 6, 1969 issue of Traffic World, the oldest and most widely circulated traffic publication and a letter to the editor relative to Reorganization Plan No. 1.