(3) Notes Payable (Account 231)- Requests information on the payee, the purpose for which the notes were issued, date of each note, date of maturity, interest rate, and balance outstanding at the end of the year.

(4) Payables to Associated Companies (Accounts 233 and 234)-Requests notes and accounts payable to associated companies including the name of the company, reference to FPC authorization to incur the debt, amount due and interest paid.

Similar information is requested for utilities filing an annual report Form No. 1-F, but the information requested is less detailed and does not show any payees of the long-term or short-term debts.

In performing its statutory responsibilities under the Federal Power Act, other information on long-term and short-term debt is requested. FPC must authorize the assumption of liabilities pursuant to section 204 of the Federal Power Act (16 U.S.C. 824c). In this connection FPC regulations (18 CFR 34) require applications to be filed that include a full description of the liabilities to be assumed.

LONG AND SHORT-TERM DEBT

FPC also receives information on long-term and shortterm debt pursuant to section 203(a) of the Federal Power Act (16 U.S.C. 824b) which states that FPC must authorize the sale, lease or other disposition, merger or consolidation of facilities or purchase or acquisition of securities of a public utility. FPC regulations (18 CFR 33) require that, with the application for FPC authorization, a statement must be submitted showing information on funded debts, including a brief description and amounts owned by affiliated corporations.

We were informed by FPC officials that, in connection with other activities, FPC requests information concerning the financial position of the regulated company, including long-term and short-term debt. However, the information requested is in summary form and does not identify any debt holder by name. For example, FPC regulations (18 CFR 35) state that any utility filing rate schedules should

submit a balance sheet.

other control information; officers and directors; and long-term and short-term debt.

Reporting Requirements Under the Natural Gas Act

Section 10(a) of the Natural Gas Act (15 U.S.C. 717i) requires natural gas companies to file with the Commission such annual and other periodic or special reports as the Commission may, by rules and regulations or orders, prescribe as necessary or appropriate to assist the Commission in the proper administration of the Natural Gas Act.

FPC regulations (18 CFR 260.1) state that an annual report-FPC Form No. 2-shall be filed by each natural gas company under the jurisdiction of FPC, if the company has annual operating revenues of $1 million or more. Pursuant to FPC regulations (18 CFR 260.2) another annual report-FPC Form No. 2-A-is to be filed by natural gas companies under jurisdiction of FPC that have annual operating revenues of $25,000, or more, but less than $1 million. These annual reports are the sources of most information received by FPC concerning ownership and control, officers and directors and long-term and short-term debt. The information received by FPC is discussed below in the same sequence as the information requested in Senator Metcalf's letter of February 9, 1973 except for the evaluation of the effectiveness of the rules and regulations which will be covered in the Comptroller General's formal response to Senator Metcalf.1

1. Information on Proprietary (Voting) Ownership

Each of the annual reports described above contains a schedule entitled Security Holders and Voting Powers. On the schedules FPC requests the names and addresses of the 10 stockholders of the company who had the largest voting powers and the number of votes each could cast at a stockholders' meeting. On the schedule presented in FPC Form 2, FPC requires that if any of the 10 stockholders held the stock in trust, a footnote on the known particulars of the trust agreement should be included. On the schedule presented in FPC Form 2-A, FPC requires

See Comptroller General's letter on p. 197.

6. Availability and Cost of Information

Both annual reports-FPC Form No. 1 and No. 1-Fand all applications described above which are received from utilities under FPC jurisdiction are available for public inspection in FPC's Office of Public Information. Persons wanting copies of documents may make copies in the Office of Public Information at a cost of 10¢ a page or may contract with Keuffel and Esser Company, 1521 North Danville Street, Arlington, Virginia 22201, to have copies made. Keuffel and Esser Company provides this service under a contract with FPC and charges 8 per copy for a 9 x 12 page, 10¢ per copy for a 12 x 18 page and 25 per copy for a 18 x 24 page and has a minimum charge of $2.00.

7. Proposals for New Legislation or Authority

We were informed by an FPC official that, during the last 10 years, no proposals have been presented to the Congress that have not been approved concerning information on proprietary ownership; subsidiary, parent and

shown. In performing its statutory responsibilities, FPC requests other proprietary ownership information as follows:

(1) Section 3 of the Natural Gas Act (15 U.S.C. 717b) states that no person shall export or import natural gas without first having secured an order from FPC authorizing it to do so. FPC regulations (18 CFR 153.10) require that an application be filed for a Presidential Permit by persons, firms or corporations contemplating the construction of, or who are operating or maintaining, facilities at the borders of the United States for the exportation or the importation of natural gas. Included as part of this application, FPC requires that, if the applicant is a corporation, the amount and class of capital stock should be filed along with the nationality of the stockholders and the amount and class of stock held by each.

PERMISSION REQUIRED

(2) Section 7 of the act (15 U.S.C. 717f) states that no natural gas company can construct, acquire, operate or abandon all or any part of its facilities without the permission of FPC. In addition, FPC may order interconnection of facilities under section 7 of the act. FPC 1 See p. 197.

29-553 74 15

regulations (18 CFR 156 and 157) require applications to be filed to request FPC to issue orders to (a) require an interconnection between gas companies, (b) ensure public convenience, and (c) permit abandonment of facilities. FPC requires that, as part of this application, information be given on any person or organized group of persons, directly or indirectly owning, controlling, or holding with power to vote, 10 percent or more of voting stock. Small gas producers are exempt from some filing requirements and may apply for a blanket certificate to cover all existing and all future jurisdictional sales pursuant to FPC regulations (18 CFR 157.40). Applications for a blanket certificate require the names of all owners of the applicant with an interest of 10 percent or more and their percentage of ownership in the applicant.

2. Information on Subsidiaries, Parents, or Control Over the Subject Corporation

The annual report, FPC Form 2, contains two primary schedules concerning subsidiaries, parents or information on control of the subject corporation-Control Over Respondent and Corporations Controlled by Respondent.

On the schedule entitled Control over Respondent, FPC requires that, if any corporation, business trust, or similar organization or combination of such organizations jointly held control over the regulated company at the end of the year, the company should show (a) the name of the controlling corporation or organization, (b) information on how control was held, and (c) the extent of the control. Also, if the control was in a holding company organization, the chain of ownership or control leading to the main parent company or organization should be provided.

On the schedule entitled Corporations Controlled by Respondent, FPC requires that the company report the names of all corporations, business trusts and similar organizations controlled, directly or indirectly, by the company at any time during the year.

OTHER INFORMATION

In addition to the two primary schedules discussed above, FPC requires other information in the FPC Form 2 for companies having operating revenues of over $1,000,000. The schedule is entitled Important Changes During the Year and includes information on the acquisition of the ownership of other companies; reorganizations, mergers and consolidation with other companies.

In performing its statutory responsibilities, FPC requires other information on ownership and control as follows:

(1) Section 3 of the Natural Gas Act (15 U.S.C. 717b) states that no person shall export or import natural gas without first having secured an order from FPC authorizing it to do so. FPC regulation (18 CFR 153) requires that an application for authorization to export or import natural gas be filed with the Commission that contains a detailed statement of the financial and corporate relationship existing between the applicant and any other person or corporation.

JUST AND REASONABLE

(2) Section 4 of the Natural Gas Act (15 U.S.C. 717c) states that FPC has the responsibility for insuring that gas rates are just and reasonable. FPC regulation (18 CFR 154) requires that rate schedules and tariffs be filed with FPC for review. Along with rate schedules and tariffs, FPC requires a statement showing a company's

preferred capital stock, and whether it is owned by an affiliate, and, if so, the name and relationship of the owner to the company.

(3) Section 7(a) of the Natural Gas Act (15 U.S.C. 717f) states that FPC can order a natural gas company to extend or improve its transportation facilities and to establish physical connection of its transportation facilities with another natural gas company. FPC regulation (18 CFR 156) requires an application to be filed by one natural gas company to have FPC order another natural gas company to extend or improve transportation facilities or establish physical connection with the applicant company. FPC requires to be included with the application information on subsidiaries and affiliates including whether the applicant directly or indirectly owns, controls, or holds with power to vote, 10 percent or more of stock of any other corporation and if any person or organized group of persons, directly or indirectly, owns, controls, or holds with power to vote, 10 percent or more of voting stock of the applicant. (4) Section 7 of the Natural Gas Act (15 U.S.C. 717f) states that no natural gas company can construct, operate or abandon all or any facilities without the permission of FPC. FPC regulations (15 CFR 157) require that applications be filed with FPC for certificates of public convenience and necessity and for orders permitting and approving abandonment of facilities. FPC also requires (15 CFR 157.14) that, as part of the application for the certificate of public convenience and necessity, information be provided on subsidiaries and affiliates of the applicant, including whether the applicant directly or indirectly owns, controls or holds with power to vote, 10 percent or more of voting stock of any other corporation and whether any person or organized group of persons directly or indirectly, owns, controls, or holds with power to vote, 10 percent or more of voting stock of the applicant. 3. Information on Officers and Directors

The annual report (FPC Form 2) contains separate schedules dealing with officers and directors.

On the schedule entitled Officers, FPC requests the names, titles, office address and salary of each general officer of the regulated company. On the schedule entitled Directors, FPC requires information on all directors, including their names, addresses, terms of office, director meetings attended during the year and fees received during the year.

Also appearing in the annual reports for all gas companies filing FPC Form 2 is a schedule entitled Security Holders and Voting Powers which requires disclosure of the name and title of officers and directors who are among the top 10 stockholders.

A list of officers and directors and their addresses and salaries received is requested from companies filing FPC Form 2-A; however, the companies are not required to file any information on officers and directors holding stock in the company.

In performing its statutory responsibilities, FPC also requests other information on officers and directors as follows:

(a) Section 3 of the Natural Gas Act (15 U.S.C. 717b) states that no person shall export or import natural gas without first having secured an order from FPC authorizing it to do so. FPC regulations (18 CFR 153.10) require that an application be filed for a Presidential Permit by persons, firms or corporations contemplating the construction of, or who are operating or maintaining, facilities at the borders of the United States for the exportation or

the importation of natural gas. Application for this permit is to be filed with FPC pursuant to regulations (18 CFR 153.10). Included as part of this application; FPC requires that, if the applicant is a corporation, the nationality of officers and directors be given and the amount and class of stock held by each.

(b) Section 7 of the act (15 U.S.C. 717f) states that no natural gas company can construct, operate or abandon all or any part of a facility without permission of FPC and, in addition, FPC may order interconnection of facilities. FPC regulations (15 CFR 156 and 157) require that applications must be filed for certification of construction; operation or abandonment of facilities or for ordering the interconnection of facilities. As part of the application, information must be filed on officers and directors who directly or indirectly own, control, or hold power to vote, 10 percent or more of the stock of any other person or organized group of persons engaged in the construction or financing of such gas facilities, enterprises or operations. The information to be submitted includes the percentage of voting stock each holds.

Also, the same application requires a listing of officers and directors, but does not require an explanation of their relationship to other corporations.

4. Information on Long-Term and Short-Term Debt

The annual report, FPC Form 2, requires detailed information on long-term debt (Accounts 221, 222 and 224), notes payable (Account 231), and payables to associated companies (Accounts 233, 234).

The schedule on long-term debt requires information on each class and series of obligation; the date issued, the date of maturity and the amount outstanding. The schedule on notes payable requires information on the payee, the purpose for which the note was issued and the amount of interest paid. The schedule on payables to associated companies requires particulars as to notes and accounts payable to associated companies, including the names of the companies, the amount of the note or account payable and the interest rate.

Section 4 of the Natural Gas Act (15 U.S.C. 717c) states that FPC has the responsibility of insuring that gas rates under FPC jurisdiction are just and reasonable. FPC regulation (18 CFR 154) requires that rate schedules and tariffs be filed with FPC for review. Also required by FPC is a statement accompanying the rate schedules and tariffs containing information on debt capital, including a statement as to whether the debt issue is owned by an affiliate and, if so, the name and relationship of the owner to the regulated company.

5. Enforcement and Effectiveness of Laws, Rules and Regulations

See Comptroller General's letter, p. 197.

6. Availability and Cost of Information

(See preceding discussion under this heading).

FEDERAL TRADE COMMISSION

The Federal Trade Commission (FTC) was established by the Federal Trade Commission Act of 1914 (15 U.S.C. 41) for the purpose of maintaining a free competitive enterprise system in the United States.

FTC administers part or all of several Acts as follows: Federal Trade Commission Act of 1914 (15 U.S.C. 41)

Clayton Act (15 U.S.C. 12).

Export Trade Act (15 U.S.C. 61).

Wool Products Labeling Act (15 U.S.C. 68).
Fur Products Labeling Act (15 U.S.C. 69).
Flammable Fabrics Act (15 U.S.C. 1191).
Textile Fiber Products Identification Act (15 U.S.C.
70).

Fair Packaging and Labeling Act (15 U.S.C. 1451).
Lanham Trade-Mark Act of 1946 (15 U.S.C. 1051).
Truth-in-Lending Act (15 U.S.C. 1601).

We were informed by agency officials that FTC does not gather information on a regular basis relating to the ownership of corporations; subsidiaries or parents of corporations; officers and directors; or the holders of long-term gather some information in these areas during special and short-term debt of corporations. However, FTC does reviews or studies or in connection with proposed mergers. Most information received by FTC is obtained pursuant to the Federal Trade Commission Act of 1914.

AUTHORITY TO REQUIRE DATA

Section 6(b) of the Federal Trade Commission Act of 1914 (15 U.S.C. 46) gives the FTC the authority to require corporations within its jurisdiction to submit prescribed information in either annual or special reports or submit business, conduct, practices, management and relationship answers to specific questions concerning the organization, and individuals. of the corporations to other corporations, partnerships

FTC regulations (16 CFR 1.21) state that general and economic surveys, investigations and reports may be made by FTC. This regulation not only applies to the Federal Trade Commission Act of 1914 but also to the other acts listed above.

The information received by FTC is discussed below in the same sequence as the information requested in Senator Metcalf's letter of February 9, 1973 except for the evaluation of the enforcement and effectiveness of the rules and regulations which will be covered in the Comptroller General's formal response to Senator Metcalf.1

1. Information on Proprietary (Voting) Ownership

We were informed by agency officials that no information pertaining to proprietary ownership is received on a recurring basis. However, we were told that there is one staff study underway-the corporate pattern report study that is seeking to develop data on the product, financial and ownership characteristics of the nation's largest manufacturing corporations. At the time of our 1 See p. 197.

review, only 18 companies had been selected to submit the data required by the FTC in order to evaluate the forms being used. The forms that are being sent to the 18 companies require the listing of the name, address, and number and percent of voting stock held by the 20 largest stockholders of record.

Pursuant to the Export Trade Act (15 U.S.C. 65) and FTC regulations (16 CFR 1.42), every association engaged solely in export trade and secking certain limited exemptions from the Sherman Act and the Clayton Act must file with FTC within 30 days of its creation and then annually the names and addresses of its stockholders or shareholders.

The corporate patterns report study also requires the manufacturers to state the name, address and percent of voting stock owned, directly or indirectly, in subsidiaries as of December 31, 1967.

3. Information Concerning Officers and Directors

Pursuant to the Export Trade Act (15 U.S.C. 65) and FTC regulations (16 CFR 1.42), every association engaged solely in export trade and seeking certain limited exemptions from the Sherman Act and the Clayton Act, must file with FTC within 30 days of its creation, and then annually, the names and addresses of its officers. We found no other reports or applications required by

Pursuant to the authority granted under section 6 of the Federal Trade Commission Act of 1914 and regulations (16 CFR 1.21), FTC requires manufacturing corporations

to submit Forms NB and MG-4 in order for FTC to

prepare a report entitled FTC Quarterly Financial Report of Manufacturing Corporations.

4 Information on Long-Term and Short-Term Debt

We were informed by FTC officials that the FTC does not regularly receive data on the long-term and short-term debts of corporations other than balance sheet data received on Form MG-4 which includes the amount of the

debt owed.

OTHER INFORMATION REQUIRED

We found three other instances where information is required pursuant to section 6(b) of the act and paragraph 1.21 of the regulations.

(1) The FTC pre-merger notification program requires corporations which are subject to FTC's jurisdiction, have assets or sales of $10 million or more, and have combined assets and sales of $250 million or more, to notify the FTC whenever they plan a merger and provide FTC with information on all of their subsidiaries as well as the details of the parent company's operations.

(2) FTC requires information concerning mergers in the food distribution industries. Form 1859-A is used to report certain operating information of the parent and subsidiaries of food distribution companies including their names, annual sales, and number of outlets.

(3) FTC requires information concerning vertical mergers in the cement industry. Among the data required to be submitted to FTC is the identity and principal business of all subsidiaries of the parties involved in the merger. In addition, FTC is conducting two industry-wide studies that are developing information on parent-subsidiary relationships as follows:

(1) The economic study of the prescription drug industry requires the reporting drug companies to identify the name and address of its parent and the name, address and basis of control of each subsidiary engaged in the sale of drugs. (2) The corporate patterns report study mentioned earlier requires the reporting manufacturers to identify the name and address of corporations which own more than 50 percent of the reporting corporation's stock. The manufacturers must also give the name and address of any corporation having the power to formulate, determine, or veto basic business decisions through the use of dominant minority stockholding rights, proxy voting, contractual arrangements, agents or other means.

Endorsement and Effectiveness of Laws, Rules and
Regulations

See Comptroller General's letter, p. 197.

6. Availability and Cost of Information

Registration statements and annual reports filed with FTC by export trade associations, and bulletins, pamphlets and reports with respect to such associations are released by the Commission as public records. The information FTC receives from each individual manufacturing corporation for compilation in the Quarterly Financial Report for Manufacturing Corporations is not available to the public. The Quarterly Financial Report for Manufacturing Corporations is available from the U.S. Government Printing Office; however, the parent and subsidiary information reported by the individual firms is not included in the FTC report.

NOTIFICATIONS MADE PUBLIC

The FTC makes public the notification it receives of planned mergers pursuant to the pre-merger notification program; however, the special reports filed with the FTC by the merging corporations are considered a part of the FTC's confidential records and are not made available to the public.

In addition, an FTC official told us that materials received in connection with (1) the economic study of the prescription drug industry, (2) the corporate patterns report study, (3) mergers in food distribution industries, and (4) vertical mergers in the cement industry are not available to the public.

We were informed by FTC personnel that the cost of duplicating public records is 20 cents a page.

7. Proposals of New Legislation or Authority

We were informed by FTC officials that the agency has not proposed legislation for new authority concerning proprietary ownership; subsidiary, parent and other control information; officers and directors; and long-term and short-term debt during the last 10 years. These officials told us that they believed that they have authority to collect any information they need pursuant to section 6(b) of the Act.

INTERSTATE COMMERCE COMMISSION

The Interstate Commerce Commission (ICC) regulates interstate surface transportation. The ICC was created by the Interstate Commerce Act (49 U.S.C. 1) and its jurisdiction encompasses railroads, motor carriers, water carriers and freight forwarders.

Information Received From Railroads

Section 20 of the Interstate Commerce Act, as amended (49 U.S.C. 20), provides ICC with authority to require annual, periodical, or special reports from carriers, lessors, and associations; to prescribe the manner and form in which such reports shall be made; and to require answers to all questions upon which ICC may deem information to be necessary.

Pursuant to this authority, ICC regulations (49 CFR 1241) state that the following annual reports shall be filed by railroads subject to regulation under Part I of the Interstate Commerce Act:

(1) Annual Report Form A-prescribed for Class I railroads (49 CFR 1241.11)

(2) Annual Report Form C-prescribed for Class II railroads (49 CFR 1241.12)

(3) Annual Report Form E-prescribed for lessors of railroads (49 CFR 1241.13)

(4) Annual Report Form G-prescribed for electric railways (49 CFR 1241.21)

(5) Annual Report Form P-prescribed for carriers
by pipeline (49 CFR 1241.61)

(6) Annual Report Form B-1-prescribed for re-
frigerator car lines owned or controlled by rail-
road companies (49 CFR 1241.70)
(7) Annual Report Form B-2-prescribed for per-
sons furnishing railroad cars, other than re-
frigerator car lines owned or controlled by
railroad companies (49 CFR 1241.71)

The information received on the aforementioned reports and in special applications is discussed below in the same sequence as the information requested in Senator Metcalf's letter of February 9, 1973, except for the evaluation of the enforcement and effectiveness of the rules and regulations which will be covered in the Comptroller General's formal response to Senator Metcalf.1

1. Information on Proprietary (Voting) Ownership

Annual Report Forms A, C, G, and P require the carriers to provide schedules of the names and addresses, number of votes and classification of stock of the 30 largest stockholders. If any such holder held the stock in trust, the particulars of the trust must be provided. In the case of voting trust agreements, the names and addresses of the 30 largest holders of the voting trust certificates and the amount of their individual holdings are to be supplied.

Annual Report Form E requires the carrier to provide in a schedule the names of its five largest stockholders. If any holder held the stock in trust, particulars of the trust must be provided. In the case of voting trust agreements, the names and addresses of the 30 largest holders of the voting trust certificates and the amount of their individual holdings are required to be submitted by the respondent. Annual Report Form B-1 requires a schedule showing the total voting securities outstanding and the total number of stockholders of record for each class of stock of the respondent. In addition, the names and addresses

1 See p. 197.

of the 10 largest stockholders in the respondent company must be provided.

MUST RECEIVE APPROVAL

Section 5 of the act (49 U.S.C. 5) states that any common carrier subject to the jurisdiction of part I of the act must apply to, and receive approval from, the ICC before entering into any contract, agreement, or combination with any other such common carrier or carriers for the pooling or division of traffic, or of service. Pursuant to this authority, ICC regulations (49 CFR 1111) provide that an application for railroad and water carrier consolidation must include the names and business address of the 10 principal stockholders of each carrier and their respective holdings.

In addition to the proprietary (voting) ownership information received in the annual report forms and application forms as discussed above, ICC order number 103-67 requires that carriers reporting corporate ownership data to ICC are required to reveal the actual individual brokerage house ownership of securities consolidated under the Čede & Co. registration because listing Cede & Co. as a holder of outstanding stock has a misleading effect.

2. Information on Subsidiaries, Parents, or Any Other Company or Firm Having Control Over Subject Corporation

Annual Report Form A requires the completion of four schedules concerning the relationship of the railroad with affiliated companies. Schedule No. 104A, entitled Companies Controlled by Respondent, requires the names of all companies which are controlled solely or jointly by the railroad, the principal business activity of each company, the form of control exercised over the companies and the extent of the control exercised by the railroad in each company. Schedule No. 104B, entitled Companies Indirectly Controlled by Respondent, requires the names of all companies which are controlled by the railroad through intermediary companies. Information required as to the particulars of such control is the same as required in Schedule No. 104A. Schedule No. 104C, entitled Companies Under Common Control with Respondent, requires the names of all companies which are controlled by the same interest that controls the railroad. Information required as to the particulars of such control is the same as required in Schedule No. 104A. Schedule No. 104D, entitled Companies Controlling Respondent, requires the names of all companies controlling the railroad beginning with the company which is most remote and proceeding to the company immediately controlling the railroad. Information required as to the particulars of such control is the same as required in Schedule No. 104A.

RIGHT TO NAME OFFICERS

Annual Report Form C requires the railroad to state whether or not any corporation had the right to name the major part of the railroad's board of directors, managers, or trustees; and if so, to provide the names of all such corporations and state how such right was derived.

Annual Report Form E requires the lessor of a railroad to complete a schedule entitled Corporate Control Over Respondent, providing the name of the controlling corporation, extent of control, total number of stockholders and the total voting power of all security holders.