provisions of S. 1508 the discontinuance of any servic Railroad would have been subject to control under pa state Commerce Act. S. 1508 was vetoed by President Eisenhower for believe are, in large part, applicable to the present bi President stated: I cannot approve the bill because it would (1) subordi President's statutory powers to those of a regulatory comm State to regulate a Federal agency, and (3) apply to the Ala rules, and procedures which are intended solely for appli owned and operated railroads and which are completely i Government agency established to carry out a public purpose. While the second reason cited by President Ei pertinent in the present case, the remaining reason in our judgment, and for those reasons the Burea recommends that S. 2413 not be enacted. The powers to construct and operate the Alaska set the rates charged by it have been vested in the Congress. To subject the President's exercise of the review and potential disapproval of the Interstate mission would be repugnant to our constitutional syste The President has delegated his functions with resp Railroad to the Secretary of the Interior, and the Ra ly treated like a bureau within the Department of reports to the Secretary through the Assistant Secr Land Management. Action such as that contempl which would also make the Railroad subject to re Interstate Commerce Commission, would establish co control. It would, we believe, create an intolerable uation in which the Secretary is responsible for the Railroad but is unable to exercise the full control requ his responsibilities. The purpose of the Alaska Railroad is quite dif of privately owned railroads. It is not established or a return on the Government's investment, but prim a public service in assisting in the development of defense of the United States. I might point out here, Mr. Chairman, that there m between the purposes of the Alaska Railroad Act a which provides for determining rates in terms of nat tion policy. While these purposes in many instances is quite conceivable that the purposes which Congre the Alaska Railroad Act-namely, defense and the 87905-62 > reatures of the Alaska капroad. laws, rules, standards and procedures concerning tariffs, rat its, services, and employees of private railroads are not suit Government agency. Accounting standards established by t tate Commerce Commission for private railroads, for examp t assure the President and the Congress of proper control ov e of Federal funds by a Federal agency. 413 recognizes that the standards applicable to private indust t appropriate by requiring the Commission to consider the nee >vernment financial agencies. However, as the General A ng Office pointed out in its objection to the previous bill, S. 150 sideration" of needs is not a clear mandate "which would co e Commission to familiarize itself with those needs and to that they be met." › General Accounting Office has also pointed out that, despi owers that would be granted to the Interstate Commerce Co ›n, the GAO would still be responsible for carrying out its fur with respect to the accounting systems and audit of the Railroa bill attempts to meet other potential problems resulting fr nique public character of the Alaska Railroad through other ons from provisions of law relating to privately owned carrie ng other matters, the bill would require the Commission to ta account national defense requirements and other national pub oses in determining the lawfulness of the Railroad's rates a es. We do not believe the Commission is particularly able suited to evaluate such broad national considerations. summary, we believe that the Railroad is subject to clear a er regulation and control by the Secretary of the Interior, t dent, and ultimately, by the Congress. If basic changes oad operations are considered necessary and desirable, th nd should be accomplished by specific amendments to the Alas oad Act and not left to determination by the Interstate Co e Commission. The President and the Congress have am ority to insure that the Alaska Railroad operates in the pul est. nator BARTLETT. Thank you, Mr. Seidman. the line of authority, what particular interest does the Bure Budget have in this legislation? . SEIDMAN. Well, we have two interests, Mr. Chairman, in t ation. these 5, rates. suited by the xample, rol over ndustry e needs ral AcS. 1508, ld comd to redespite ce Comits funcRailroad. ng from other excarriers. to take al public ates and yable or lear and erior, the anges in ole, they he Alaska ate Com ve ample he public e Bureau n, in this The Bureau of the Budget at present does have to pre of rules applicable to agencies in the way they submi in the way they maintain their accounting systems purposes, and for financial reporting purposes. T which, under this bill, might be prescribed by the Inter Commission could very well be inconsistent with, or no the purposes of the regulations which would be desired of the Budget in carrying out its responsibilities with Budget of the United States. Senator BARTLETT. When you appear here this mor man, you are directly representing the President? Mr. SEIDMAN. I could not say that, Mr. Chairman to my knowledge has not been within recent times di with him. I would say I am representing the viewp ministration. Senator BARTLETT. Do you know if President Eiser intimate knowledge of the Alaska Railroad situation b he affixed his signature to the veto message? Did yo him about this? Mr. SEIDMAN. I did not personally talk to him abou I know that a rather detailed memorandum went forw ident which he read. Senator BARTLETT. That is hearsay, is it not? Mr. SEIDMAN. It is hearsay, Mr. Chairman. I think Hawaii or Alaska at the time the veto came up. I w ington at the time. But I do know that it was discussed with the Presid As you say, it is hearsay. I was so informed by the staff. Senator BARTLETT. Do you know if a memorandum has been supplied to President Kennedy, and, if so, read it or whether he has been verbally instructed in such as they are, involving this bill? Mr. SEIDMAN. I am not at all certain of this, Mr. know it has been discussed with members of the Presid Whether it has been discussed directly with Iwould not know. ever. Senator BARTLETT. Do you know with which memb dent's staff discussions have been held? Mr. SEIDMAN. As you know, these types of discussio considered to be privileged. As to who the particul involved was, I would not be at liberty to say. ་ I of the ICC Act, nowever, still would be applied to the Alas oad. ator BARTLETT. But, in essence, this bill removes, does it n ajor points of objection except the first, namely, the contenti t would subordinate certain of the President's statutory power . SEIDMAN. I do not think it does entirely, no, because I do n the ratemaking provisions of part I of the ICC Act are nec fully in accord with the purposes of the Alaska Railroad A e operation of a Government-owned railroad which is serving r specific purpose. lator BARTLETT. But the President .SEIDMAN. The accounting, budgeting, and financial provisio have not been changed. hink the new bill, Mr. Chairman, compounds the problems. now, there are a number of places where the bill enjoins the I ve due consideration to the needs of other people in the Gover , which I think in itself is a recognition of the rather spec s of the Railroad. However, the final authority under the b Il in the ICC. All the ICC is required to do is to give due co ation to defense and other developmental purposes for valuati cost-finding purposes. nator BARTLETT. Admittedly, this is an unusual situation and o difficult of resolution. And you recall, of course, that the la e to which you now refer was inserted with the acquiescence nterstate Commerce Commission, I might add, after it had be ested principally within Alaska, as I recall, that to leave without any such provisions could conceivably theoretically, if lly, create a situation whereby the Railroad would be requir e ICC to make a return on its capital investment, and so for d if that were done, everyone understands now, as then, that t d bring about a great incraese in rates that would be intolera he Alaskan public. that same page of your statement, at the bottom of page 2, 1 sentence reads in these words, and I quote: subject the President's exercise of those powers to the review and poten proval of the Interstate Commerce Commission would be repugnant to tutional system. ould you elaborate upon that, Mr. Seidman, to inform the co e how this would do violence to the constitutional system? .SEIDMAN. Under the constitutional system, the Executive pov sted in the President, and he is enjoined to take care that are faithfully executed. sions of Alaska it not, ntention powers! I do not e neces pad Act erving a ovisions ms. As the ICC Governspecial the bill Que conaluation and one the lancence of ad been eave the y, if not required so forth. chat this colerable ge 2, the potential nt to our che comem? ve power that the by the ICC against the President of the United S an ICC regulation. Usually, where there have been disputes between ex the courts have said that these are political matters, diversity of interest, and the courts would not decide be up to the President to decide. So in these respects, I think, the bill puts the ICC in to enforce its regulations, it would have to take some a Chief Executive of the United States, in whom the p E law are vested. On the other hand, in carrying o which the President is accountable to Congress, he wa some degree under this bill by actions taken by an ag to the Congress. Senator BARTLETT. You think, then, if anything s to be done that violence would be worked against the Mr. SEIDMAN. I think it would not be consistent wi the separation of powers and the vesting of Execut President. For example, at times bills have been enac have limited the President to appointing people fr panel nominated by others. The Attorney General ha such a provision would constitute an undue limitatio of Presidential power. Senator BARTLETT. What is the basis of this objec ICC is in sort of a shadowland, is an independent agedependent, a creature, as the saying goes, of the Con fore not subject to the authority and jurisdiction branch? Mr. SEIDMAN. I think in part the ICC as a regulato nature and way it is created, is not, in fact, responsiv direction in the same way as an executive departmen The Supreme Court has recognized that there is a dis a regulatory commission performing quasi-judicial a tive functions and an executive agency and that there the degree of authority which is possessed by the Pre with such agencies. So that when this function is put in the ICC, while in a gray area, certainly it would be in an agency wh to Presidential direction and supervision and control t as an executive department or agency. But more important, in this case, Mr. Chairman, I find this particular provision equally objectionable i enacted which said the President was to perform certa |