U.S. SEN COMMITTEE ON CO Wash The committee was called to order, pursuant to notice in room 5110, New Senate Office Building, Hon. E. L siding. Senator BARTLETT. The committee will be in order. In our hearing this morning, we will take up S. 2413 provide for economic regulation of the Alaska Railroad state Commerce Commission. During the 86th Congress, both the Senate and the I bill (S. 1508) which would have provided for such reg was vetoed by President Eisenhower, and, I might add, amazement, even profound shock. Since that time, substantial amendments have been m posed bill, particularly concerning the hours of servic Last fall, I conducted hearings in Alaska on trans fisheries matters, and these hearings served to reaffirm belief that a balanced transportation system by all mode within Alaska could best be achieved by bringing the A under economic regulation, or, alternatively, that that reached all the easier and all the sooner if the Alaska brought within such regulation. I might say that all witnesses who testified in Alaska then General Manager of the Alaska Railroad, Mr. Do agreed that this basic goal was desirable. There was some disagreement, however, over the sp that was to be used. With this background in mind, I requested, and the cl full committee, Senator Magnuson, granted, this morni order to see if it would not be possible to get moving ond measure which is desired and needed by Alaskans. It is certainly not my intention to place or to seek to pl Railroad in a position where it might become nonco other modes of transportation or where it would not serve the strategic and defense situation which is such part of the Federal interest and the Federal responsibil ter. However, at the same time, it should be recognized a growing number of private transportation compan both highway and water, who believe that their conti Professional staff member assigned to this hearing, Gerald B. Grinstein said it would subordinate certain of the President's statuto rs to those of a regulatory commission. said it would allow a State to regulate a Federal agency. d he said it would apply to the Alaska Railroad laws, rul procedures which are intended solely for application to private d and operated railroads. ing on, he said that these would be completely inappropriate 1 vernment agency established to carry out a public purpose. e bill we are considering this morning, S. 2413, has removed t ose three objections: (1) it does not permit the State governme gulate the Alaska Railroad, which is a Federal entity, and ( it are absent those provisions relating to safety of operatio ours of service. this connection, I might say that I have given assurance to e es of the Alaska Railroad that, independently of this measu ld seek legislation taking care of the safety considerations. d so the bill, in essence, now before us, removes two of the th tions stated by President Eisenhower. It does not, of cour ve that objection which he placed in the first instance in his v ge, namely, that it would change or alter or diminish the Pre sauthority and transmit it instead to an independent regulato ey. 2413 is as follows:) [S. 2413, 87th Cong., 1st sess.] L To provide for economic regulation of the Alaska Railroad under the Inters Commerce Act, and for other purposes t enacted by the Senate and House of Representatives of the United Sta erica in Congress assembled, That the first paragraph of the first sect Act entitled "An Act to authorize the President of the United States , construct, and operate railroads in the Territory of Alaska, and for ot ses", approved March 12, 1914 (38 Stat. 305), as amended (48 U.S.C. 30 nded to read as follows: at the President of the United States is hereby empowered, authorized, ed to adopt and use a name by which to designate the railroad or railro roperties to be located, owned, acquired, or operated under the author s Act; to employ such officers, agents, or agencies, in his discretion, be necessary to enable him to carry out the purposes of this Act; to e and require such officers, agents, or agencies to perform any or all ties imposed upon him by the terms of this Act; to detail and require or officers in the Engineer Corps in the Army or Navy to perform serv this Act; to fix the compensation of all officers, agents, or employ ted or designated by him; to designate and cause to be located a ro tes for a line or lines of railroad in the State of Alaska not to exceed gregate one thousand miles, to be so located as to connect one or more lent Eisenhower dent's statutory gency. appropriate for ic purpose. as removed two ate government entity, and (2) of operations surance to emE this measure, iderations. wo of the three not, of course, nce in his veto ish the Presint regulatory er the Interstate hereafter in force there; to acquire rights-of-way, terminal other rights; to purchase or otherwise acquire all necessary construction and operation of such railroad or railroads; to b acquire docks, wharves, terminal facilities, and all structure equipment and operation of such railroad or railroads; to or modify rates for the transportation of passengers and pro compensation for the transportation of passengers and propert generally all the usual duties of a common carrier by railro establish rules and regulations for the control and operation o railroads: Provided, That effective one hundred and eighty day ment of this proviso, and thereafter, the operation of the said roads and the facilities and equipment thereof shall, to the be subject to the provisions of part I of the Interstate C amended, in the same manner and to the same extent as if railroads and facilities were privately owned and operated, ex as such railroad or railroads continue to be both wholly ow by the United States of America or by one of its departments agencies: (1) the Interstate Commerce Commission in detern ness of rates or charges maintained, or from time to time pro tained, by such railroad or railroads, shall give due considera things, to the national public purposes which to a substantial the construction, expansion, maintenance, and improvement t ticular reference to the requirements of the national defense, as and development of natural resources, and shall to the ext the facts recognize for valuation and cost-finding purposes both capital investment and operating expenses which are f attributable to such national public purposes, distinguishing t railroad common carrier investment and operational expense rates and charges be deemed to be unlawful solely because sufficient revenues to cover any amounts for taxes not act law to be paid or provide a return on capital investment; (2) of part I of the Interstate Commerce Act relating to the ab tension of lines of railroads, discontinuance of service, issua safety of operations and equipment, and penalties and forfeit applicable; and (3) that in carrying out its duties under sectio state Commerce Act, as amended, the Commission shall cons the Comptroller General of the United States, the Secretary the Director of the Bureau of the Budget, and the Secretar pursuant to provisions of law with respect to the accounting, reporting, and budgetary requirements of such railroad or ra pass or free or reduced rate or fare transportation shall be permitted by the provisions of part I of the Interstate Con President is empowered and authorized in his discretion, railroad or railroads, or any portion thereof, including telegra lines, after completion under such terms as he may deem pr of such railroad or railroads shall be for a longer period t and no other lease authorized in this Act shall be for a lo fifty-five years, or in the event of failure to lease, to operate t further action of Congress. If the said railroad or railroad graph and telephone lines, are leased under the authority give they shall be operated by the lessee under the jurisdiction a provisions of the interstate commerce laws. The President a and authorized to purchase, condemn, or otherwise acquire up he may deem proper, any other line or lines of railroad in A e United States he first section nited States to and for other 18 U.S.C. 301), uthorized, and d or railroads the authority discretion, as s Act; to auany or all of d require any rform service or employees ated a route to exceed in e or more of not be charged against the fund provided for in this Act." 2. The Act of April 10, 1926 (44 Stat. 239), relating to free transportati Alaska Railroad, is hereby repealed. r first witness this morning will be Mr. Harold Seidman, Acti tor for Management and Organization, Bureau of the Budg . Seidman. EMENT OF HAROLD SEIDMAN, ACTING DIRECTOR, OFFICE NAGEMENT AND ORGANIZATION, BUREAU OF THE BUDGE COMPANIED BY HOWARD SCHNOOR, MANAGEMENT ANALY . SEIDMAN. Mr. Chairman, I am accompanied by Howa oor, my assistant in the Office of Management and Organizatio nator BARTLETT. We are always glad to have both of you befo d with us. . SEIDMAN. It is always a pleasure to appear before you, M man, although this particular matter is one of the few where - we have been in some disagreement. nator BARTLETT. I am amazed. SEIDMAN. Mr. Chairman, I have a very brief statement a d, with your permission, like to read it. nator BARTLETT. Please. . SEIDMAN. Mr. Chairman, I am pleased to appear before you o discuss S. 2413, a bill to provide for economic regulation of ka Railroad under the Interstate Commerce Act, and for ot oses. sically, S. 2413 would, within 180 days of enactment, make ally owned and operated Alaska Railroad subject to the pro of part I of the Interstate Commerce Act in the same manner a e same extent as if the Alaska Railroad were privately owned a ted. carrying out its regulatory functions under part I of the Int Commerce Act, relating to the determination of railroad ra charges, the Interstate Commerce Commission is to give due c ation to the national public purposes for which the Alaska R was created and capitalized by the Federal Government, ng defense and the development of the natural resources ха. rther, the provisions of the Interstate Commerce Act relating donment, discontinuance, and extension of services, safety, p , and certain other matters would not be applicable. |