WESLEY A. ROGERS, Editor Common Carriers Rate of Return The Commission has instituted a general proceeding in Ex Parte 271-Net Investment-Railroad Rate Base, Order served December 15, 1970. The proceeding seeks the development of a full record containing the views of all interested parties to enable a determination by the Commission upon the question whether the use of net investment in transportation property plus the cost of the land and allowance for working capital, which the Commission has used and is using, is appropriate in the measurement of rate of return of rail common carriers. The nature of further proceedings is to be designated by the Commission at a future time when it issues its service list of all persons who have expressed an interest in the matter. While having technical application to common carriers by railroad, the proceeding necessarily is of the greatest concern to all common carriers, and brings recollection of the remarks of J. W. Hershey to the ICC Practitioners at their June 22, 1967 Annual meeting upon the investment imperative as related to transportation pricing. (34 Pract. 5, p. 939). In view of Ex Parte 271, Mr. Hershey's summation of a transportation pricing policy is pertinent: A pricing policy which satisfies revenue requirements must provide coverage of actual costs plus needed earnings. 1. It must cover the true expenses of performing the service, including the inevitable replacement of worn-out or obsolete equipment and facilities at prices current at the time of replacement. To the extent that depreciation charges do not anticipate replacement costs transportation service is underpriced and the extent of such underpricing becomes progressively more serious in periods of sustained inflation. 2. It must provide a fair return on past investment and a return incentive sufficient to attract new funds in competition with other industries. 3. It should permit stable planning of investment outlays over a period so that growth, improvement and innovation can be funded in an orderly manner. Editors Note: The statistical forecasts in Mr. Hershey's statement of 32 years ago have proved conservative. Mr. Hershey is currently Chairman of the Board, American Commercial Lines, Inc. The Water Carrier Mixing Rule Bill HR8298 (ICC Docket WC-5) (Enacted and Approved December 28, 1970) This problem, having its genesis in 1960, has been resolved by the enactment and approval of PL-91-590, 91st Congress, on December 28, 1970. The enactment with Legislative History follows: Public Law 91-590 AN ACT 84 STAT. 1587 To amend section 303 (b) of the Interstate Commerce Act to modernize certain restrictions upon the application and scope of the exemption provided therein, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 303 (b) of the Interstate Commerce Act, as amended (49 USC 903(b)), is amended to read as follows: (b) Nothing in this part shall apply to the transportation by a water carrier of commodities in bulk when the cargo space of the vessel in which such commodities are transported is being used for the carrying of not more than three such commodities. This subsection shall apply only in the case of commodities in bulk which are (in accordance with the existing custom of the trade in the handling and transportation of such commodities as of June 1, 1939) loaded and carried without wrappers or containers and received and delivered by the carrier without transportation mark or count. The exemption afforded under this subsection to the transportation by a water carrier of commodities in bulk shall not be lost by the concurrent transportation in the same vessel of other commodities. For the purposes of this subsection two or more vessels while navigated as a unit shall be considered to be a single vessel. This subsection shall not apply to transportation subject, at the time this part takes effect, to the provisions of the Intercoastal Shipping Act, 1933, as amended. SEC. 2. The amendment made by the first section of this Act shall expire at the end of the three-year period beginning on the date of its enactment. The Interstate Commerce Act, amendment. 54 Stat. 931. Water carriers, bulk commodi ties, exemption. 47 Stat. 1425. 46 USC 848. Study. Report to Secretary of Transportation shall undertake a comprehensive study of the present system of economic regulation of dry bulk commodity transportation, including information on amounts actually charged for the movement of dry bulk commodities; of the effect of this Act upon the carriers to whom it applies and upon the shippers of dry bulk commodities; and what changes in the existing regulatory system, if any, would be desirable to improve competitive conditions between carriers of different modes whether or not subject to the provisions of the Interstate Commerce Act. The Interstate Commerce Commission and the Secretary of the Army are directed to cooperate fully with the Secretary of Transportation in carrying out the purposes of this Act, and to submit such independent and separate comments and views as those agencies deem appropriate. The Secretary shall transmit the results of such study to the Congress within two years after the date of enactment of this Act. SEC. 3. In carrying out its functions under section 2 of this Act, the Secretary of Transportation may require water carriers operating under the exemption contained in section 303 (b) of the Interstate Commerce Act to file such reports containing such information as the Secretary may prescribe. Approved December 28, 1970. LEGISLATIVE HISTORY: 84 STAT. 1588 54 Stat. 931. HOUSE REPORTS: No. 91-520 (Comm. on Interstate and Foreign Commerce) and No. 91-1744 (Comm. of Conference). SENATE REPORT No. 91-1330 (Comm. on Commerce). Aug. 12, considered and passed House. Nov. 23, considered and passed Senate, amended. Dec. 16, Senate and House agreed to conference report. ORGANIZATION, PRACTICE, AND PROCEDURE C. H. JOHNS, Editor Commission Assignments for 1971 On December 30, 1970, Chairman Stafford announced that the Commission has unanimously reelected Commissioner Dale W. Hardin to serve as vice chairman for 1971. This marks the first time in history that the Commission has elected the same Commissioner to serve as its vice chairman for two consecutive years. Vice Chairman Hardin was appointed to the Commission in 1967, for a term expiring December 31, 1972. A native of Peoria, Illinois, he is a graduate of the George Washington University Law School. Chairman Stafford also announced the following assignments for 1971: DIVISION ONE DIVISION TWO DIVISION THREE (Finance) LEGISLATION RULES DIVISIONS Commissioners Rupert L. Murphy (Chairman), Virginia Mae Brown and Willard Deason Commissioners Laurence K. Walrath (Chairman), Donald L. Jackson and W. Donald Brewer Commissioners Kenneth H. Tuggle (Chair- George M. Stafford, Chairman Ex Officio, George M. Stafford, Chairman Ex Officio, Commission Issues 84th Annual Report The Interstate Commerce Commission transmitted its Annual Report for fiscal 1970 to the Congress on January 19. The report is an account of the transportation problems the Commission faced during the year and the avenues that have been taken toward their resolution. • The report notes that wide ranging actions in 1970 are setting an effective pattern to protect the shipper of household goods from abuses which have long plagued the moving industry. • Rail shippers have been aided by the Commission's progress in alleviating the freight car shortages. -427 The small shipper also received help this year as the Commission acted to force motor carriers to transport freight to the full extent of their operating obligation. Improvement in the organization is also evident in the report. The restructuring began with the appointment by President Nixon of a permanent chairman to replace the former system of rotating members into the chairmanship each year. Realignment of staff functions included creation of a separate Office of Hearings, reporting directly to the Chairman. For the first time, the Annual Report provides statistical data showing the financial status of conglomerate holding companies and the railroads they control. With a continually increasing workload in all areas, especially in applications for motor carrier operating authority, the Commission response has been to concentrate its efforts in the area of rulemaking proceedings to resolve major problems on a regional or national basis thus providing guidelines for faster resolution of specific cases. The report shows that operating revenues of ICC-regulated carriers rose for calendar year 1969, on an average of 6.7 percent, except for REA Express, which declined 9.8 percent. Although ton-miles of freight carriers rose by a total of 3.2 percent for all modes, ordinary income was down for both rail and motor carriers, with a significant drop of 75.9 percent for eastern district rail carriers. Since the last edition of the Journal the ICC has made the following staff changes: William J. Bateman and James E. Hopkins were appointed as Assistant Chief Hearing Examiners. Examiner Bateman, a native of Ohio, is a graduate of the Ohio State University and is a member of the Ohio Bar. He joined the staff of the Commission in 1947 as an attorney in the Bureau of Motor Carriers. From 1953 through 1965 he served on the staffs of Commissioners Tuggle, McPherson, and Tierney and became a hearing examiner in 1965. Examiner Hopkins, a native of Rhode Island, attended Providence College and is a graduate of St. Louis University School of Law, St. Louis, Missouri. He is a member of the Missouri and Rhode Island Bars. After private practice in Rhode Island for five years, he joined the staff of the Commission in 1957 as an attorney in the Bureau of Rates and Practices. He served from 1959 through 1967 on the staffs of Commissioners Walrath, Webb, and Stafford and became a hearing examiner in 1967. Larry Reida was appointed to be Associate General Counsel for legislation. Mr. Reida was serving as the Associate Chief Counsel for the Select Committee on Crime of the U. S. House of Representatives. Before assuming those duties in July, 1969, he served approximately two years on the staff of Robert V. Denney of Nebraska. |