Mr. MCGINTY. Vessel sailings. So, we presented the matter to you gentlemen in one of our hearings, and you inserted this prohibition.

Mr. WOODRUM. And it has been carried regularly?

Mr. McGINTY. It has been carried regularly since, and if you eliminate it now we will have to ask you for a material increase in our appropriation for printing. It is of no good to anyone, and there is no reason why it should be printed.

Mr. McMANAMY. At least by us.

REGULATION OF MOTOR VEHICLE TRANSPORTATION

Mr. WOODRUM. The Interstate Commerce Commission so far has never been given any jurisdiction over motor-vehicle transportation? Mr. McMANAMY. No, sir. We have recommended that we be given that jurisdiction, and I appeared before the House Committee on Interstate Commerce and also the Senate committee in support of it, but so far there has been no legislation passed giving us jurisdiction. Mr. LAMBERTSON. Is there any considerable agitation for it this winter?

Mr. McMANAMY. I do not know.

Mr. LAMBERTSON. We hear a good deal about it at home.
Mr. WOODRUM. Yes. We had a bill in the House.

Mr. McMANAMY. The House reported a bill, and I think passed it, but the Senate failed to pass it. It is a matter, I think, that goes largely to the present condition of the railroads, which we all know is not good. There are two forms of transportation. One is pretty strictly regulated and the other not regulated at all by the Federal Government. It is regulated by States; and it would seem, and we have so recommended, that somebody be given authority to regulate interstate motor vehicles.

Mr. WOODRUM. I have recently come in contact with at least two very large motor-vehicle-transportation operatives, and much to my astonishment I found that they were heartily in favor of it.

Mr. McMANAMY. I think that is true of the majority of motorvehicle operators.

Mr. WOODRUM. They said they would be very glad to see regulation of it, so as to put irresponsible people out of it.

Mr. McMANAMY. Yes. I think it would be a good thing all around.

Mr. LAMBERTSON. They are not making anything now, in the face of this competition.

Mr. McMANANY. It is more, of course, than a question of competition. It is a question of unfair competition. Much of the motorvehicle business is done by agencies which hire truckers to handle the traffic, and the agency which contracts with the trucker has nothing whatever to do with the transportation except to turn it over to somebody else, and the competition there between truckers is so keen that when they wear out one set of tires they have not earned money enough to buy another; but there is always a new man in line waiting to take their place. So it is a bad situation.

Mr. WOODRUM. Thank you, Mr. Commissioner.
Mr. McMANAMY. Thank you, Mr. Chairman.

VALUATION OF PROPERTY OF CARRIERS

SALARIES AND EXPENSES

Mr. WOODRUM. The next item covers the valuation of property of carriers, as follows:

Valuation of property of carriers: To enable the Interstate Commerce Commission to carry out the objects of the Act entitled "An Act to amend an Act entitled 'An Act to regulate commerce', approved February 4, 1887, and all Acts amendatory thereof, by providing for a valuation of the several classes of property of carriers subject thereto and securing information concerning their stocks, bonds, and other securities", approved March 1, 1913, as amended by the Act of June 7, 1922 (U. S. C., title 49, sec. 19a), and by the "Emergency Railroad Transportation Act, 1933" (48 Stat., p. 221), including one director of valuation at $10,000 per annum, and traveling expenses, $1,041,100.

Your current appropriation for this purpose is $1,052,700, and your estimate for 1936 is $1,041,100.

Mr. LEWIS. If you will look at that item, Mr. Chairman, you will see that, following the recommendation which we made to the Director of the Budget, the appropriation that is recommended to you gentlemen is less than the current appropriation, and that there are no increases anywhere along the line. We hope, and we commit ourselves here, to absorb the remaining 5 percent, and, if that is done, it means that we will make a saving over the present year of $119,600 and over last year of $183,000. Still, in facing that commitment, we are going into one of the most active years we have encountered, and we are going into an even more active year next year. Because of the usual demands made on us, which are increasing, and added work resulting from an order of the Commission to which I shall refer later, the appropriation which we ask and that is recommended by the Budget, is really inadequate.

The Federal Coordinator has told you of some of the demands he has been making on us, to which I shall refer later. There is little doubt that his office or some agency performing similar duties will become a permanent factor in our relations with the transportation agencies.

The

After this estimate was made, as of June last, because we have to make our estimates in June, the pipe-line situation became very acute in several fields, particularly in Oklahoma, Texas, and Kansas, with the result that there is pending before the commission now a proceeding regarding the reasonableness, the discriminatory or nondiscriminatory character, and all the other phases of rates and service for the transportation of petroleum and petroleum products by pipe line. gas pipe lines are not under our jurisdiction; but in the last Congress there was some talk of their being put under us. There has been considerable agitation in some States, in Kansas among others; in the East, and also, in West Virginia, I believe, of the matter of the transportation of natural gas. At all events, we are now proceeding to value the 100,000 miles of interstate petroleum and petroleum products pipe lines in this country. That is a great unknown system. It is not generally known that there are 100,000 miles of petroleum pipe lines actively engaged in competition with the railroads. Also, the oil situation as you know, is one of the great conservation problems of the National Administration. Secretary Ickes, the Oil Administrator, is handling that matter. We have been in correspondence with Secretary Ickes right along, and in his early pronouncement a

year ago, and recently before the subcommittee of the House Committee on Interstate and Foreign Commerce which is investigating the petroleum situation, he has stated that these are things that should be gone into, and he favored the Interstate Commerce Commission valuing the pipe lines. At any event, the Interstate Commerce Commission, since these estimates were made, has ordered the valuation of the petroleum and petroleum products pipe lines.

REGULATION OF RATES OF PIPE LINES

Mr. WOODRUM. Does the Interstate Commerce Commission have the right to regulate the rates of pipe lines?

It

Mr. LEWIS. Yes; the first paragraph of section 1 covers that. does not have jurisdiction over the transportation of water or artificial or natural gas.

Mr. WOODRUM. Is this valuation being made for rate-making purposes?

Mr. LEWIS. Yes; for rate-making and all requirements of the law; and to comply with the act.

Mr. WOODRUM. Do security or stock issues figure in that?

Mr. LEWIS. The Commission does not have jurisdiction over securities of pipe-line companies. It has just recently issued an order covering the depreciation rate of pipe lines; so that indicates that the regulation goes pretty deep.

Mr. WOODRUM. Is the purpose of your valuation of pipe lines rate-making, or is it made for rate-making purposes?

Mr. LEWIS. Yes, sir; for that and other purposes, such as ascertaining existing and annual depreciation of the properties. The act directs the Commission to inventory the properties, ascertain and report investment, original cost, cost to reproduce new and depreciated, the condition, classification, and value.

ECONOMIES EFFECTED

I think I have covered in a summary way what this reduction in appropriations means to us all along down the line. It is summarized in that figure of $119,600 below the appropriation for the present year, and $183,000 below the appropriation for the last year.

To meet this reduction and, at the same time, carry on our work, we have already pressed economies to the extreme. For example, our Bureau has a per diem expense account of only $4 per day, as compared with $5 per day throughout the rest of the Commission, with the exception of the Bureau of Accounts. We have also had to adopt short cuts in our work in order to meet the situation that was presented by the 71-percent cut in our appropriation since June 30, 1933, which resulted in a 61-percent cut in our personnel. Our personnel last year was reduced, as you probably will recall, on June 1, from 915 to 381. The 381 were carried only by going on a 5-day basis. Mr. WOODRUM. They were staggered.

Mr. LEWIS. Yes, sir; for awhile. While we got through with that we are here faced with a rather difficult situation. This further reduction means another reduction in force of about 50 people. We were thinking that would be largely taken care of by the turn-over in personnel. While we had a turn-over last year reducing staff from 381

to 353, from July 1, this year we have had no turn-over. Nobody is going out; nobody is resigning; so that means another difficult situation for us to face. I cite that to show the extremity that we will be up against in view of the amount of work that is ahead of us.

I might say here, in passing, that we are going to attempt to throw most of the expense of the pipe-line valuation off the Government. The law requires us to make an inventory and valuation. This means that we must have an inventory that we can accept as our own but we shall let the carriers do most of the work on that. We must follow that work, however, to such an extent that we can accept it as our inventory. We could not do this work unless we followed this procedure. I do not know whether we shall be able to do it even under these conditions.

Instead of putting several score of men into the field, it seems that we will have about 12 engineers in the field. There will be land men and accountants but their number must be held to a minimum. This conforms to the last word that Congress has spoken on the matter of valuations, which, I believe, was in the Communications Commission Act. That act provides that the Commission can call on the carriers to file their inventories with it. We shall superintend the work, as well as check the inventories, so that we will be able to accept them as our inventories.

CHECKING PROPERTY CHANGE REPORTS OF CARRIERS

It is hardly necessary to recite to you, because all of you are such veterans in this business, what the duties are that we are required by law to perform in a regular way. The law, as amended only last year, requires us to follow carrier property in all of its changes including valuation, original cost, and investment and be ready at all times to respond to calls from the Commission and Government agencies, such as the Federal Coordinator, may make on us. Later, I shall summarize those requirements.

Mr. WOODRUM. Does the Reconstruction Finance Corporation make calls on you for information?

Mr. LEWIS. Yes; with your permission I will go into that further on. We are required to keep informed of the changes that are going on in these properties. It is hardly necessary to recite that. Mr. WOODRUM. Do you mean railroad property?

Mr. LEWIS. Yes, sir; steam railroad properties and the properties of other carriers subject to the act. The changes generally run all the way from several hundred million dollars to over a billion dollars annually. Even in times of depression, there is a great change in those properties. In 1933 charges in and out-largely the lattertotaled $450,000,000. We must follow these changes and check them. We cannot accept the reports of the carriers: we have to check them; otherwise our records would soon be simply the reports of the carriers. Of course, Congress provided for that work; it foresaw the changes that would occur.

If the work is to be of value, it must be properly and currently done. Congress in amending the law last year said that it was providing "a practical working tool and guide for the Commission, in order to enable it to properly perform its many regulatory duties or to Congress itself when the railroad situation is becoming so critical."

Now, that is actually what it has turned out to be. With the technical simplifications that we have been able to make effective, it has produced some remarkable results. As I have been sitting here, I have been looking over a statement of the status of reports on railroad properties in the territories represented by you three gentlemen. Starting with your section, Mr. Woodrum, the Richmond, Fredericksburg & Potomac's property change records are filed up through June 1933.

The Seaboard Airline property changes are reported now for 1931, and they are going well along through 1933. That property, as you know, has been under the jurisdiction of Federal Judge Way, at Richmond. He has called not only for detailed surveys and information as to the status of the Seaboard which is in receivership, but also as to the Norfolk & Southern. The Virginian Railroad property changes report is through 1933. The C. &. O property changes rerort for 1932 is due early in the year. The Norfolk & Western is filed through 1932.

Going now into your country, Mr. Wigglesworth, we have received the report of property changes of the New Haven through 1932; for the Boston & Maine through 1931, and the carrier's report for 1933 is due this month. We have them for the Bangor & Aroostook through 1933; for the New York Central through 1932, with a report for 1933 due early in the year.

Mr. Lambertson, I believe you are from Kansas.

Mr. LAMBERTSON. Yes.

Mr. LEWIS. We have the Atchison, Topeka & Santa Fe property changes through 1931, and the carrier's report through 1933 is due. in the spring. The Rock Island report is due this month covering the period to the end of 1933. We have before the Interstate Commerce Commission right now a report covering a revaluation of the Rock Island for 1932. That is to be acted on. The Rock Island, as you know, has been proposing to bring about certain consolidations, and the revaluation was desired for that purpose. The property changes report for the Union Pacific for 1933 is due in April. We have the changes for the Kansas City Southern through 1932, and they are advancing into 1933. The Burlington, through 1933, is due by May or June of this coming year.

to us.

This statement would lead you to suppose that we are catching up with the work, and that is the fact. But that statement should be qualified by this fact, that these are the reports of the carriers We have to check them and then translate them into inventories. Much of it is checked but we still are considerably behind in that work because of the reduction in force and the demands for emergency or special work. We are able, nevertheless, to respond to emergency calls at any and all times. When we do not have the unit factor, we resort to the money factor until the unit report comes in and is checked. Every January there is added another year of change on the 250,000 miles of railroad lines that we must handle, as well as the work of catching up with that which is accumulated. There are 800 class II and class III and switching and terminal railroads, and the work as to some of them is not so good as that which I have stated in referring to important carriers in your localities. However, most of them are coming along well. I might say