(Page 3) more carriers, by one or more persons which are subsidiaries by virtue of this subparagraph (d), or by one or more such persons and one or more carriers, unless the Commission, as provided in subparagraph (g), by order determines such company not to be a subsidiary; or (B) a person which is controlled directly or indirectly, by stock ownership, lease, agreement, or voting trust, by common officers, directors, or stockholders, by reason of circumstances surrounding organization or operation, or by any method whatsoever, by one or more carriers, by one or more persons which are subsidiaries by virtue of this subparagraph (d), by one or more such persons and one or more carriers, or by any other person or persons having such control under any indenture, trust, or other agreement or arrangement with, or by means of the assets of, one or more such persons or carriers. (e) The term "controlling person" as used in this part means (A) α person which directly or indirectly holds with power to vote, owns, or controls, 10 per centum or more of the outstanding voting securities of a carrier or of a person which is a controlling person by virtue of this subparagraph (e); or (Page 4) (B) a person which controls, directly or indirectly, alone or pursuant to an arrangement or understanding with one or more other persons, by stock ownership, lease, agreement, or voting trust, by common officers, directors, or stockholders, by reason of circumstances surrounding organization or operation, or by any method whatsoever, a carrier or a person which is a controlling person within the meaning of this subparagraph (e). (f) The term "affiliate" as used in section 20 of this part means— (A) a company 10 per centum or more of the outstanding voting securities of which are directly or indirectly held with power to vote, owned, or controlled, by one or more controlling persons, by one or more persons which are affiliates by virtue of_this_subparagraph (f); or by one or more such persons and one or more controlling persons; or (B) a person which is controlled, directly or indirectly, by stock ownership, lease, agreement, or voting trust, by common officers, directors, or stockholders, by reason of circumstances surrounding organization or operation, or by any method whatsoever, by one or more controlling persons, by one or more persons which are affiliates by virtue of this subparagraph (f), by one or more such persons and one or more controlling persons, 12345678 10 (Page 5) or by any other person or persons having such control under any indenture, trust, or. other agreement or arrangement with, or by means of the assets of, one or more such persons or controlling persons. (g) The Commission, upon application, shall by order 6 declare that a company is not a subsidiary under clause (A) of 7 subparagraph (d) if the Commission finds that the applicant is not controlled, directly or indirectly, by stock ownership 9 lease, agreement, or voting trust, by common officers, directors, or stockholders, by reason of circumstances surrounding or11 ganization or operation, or by any method whatsoever, by one 12 or more carriers, by one or more subsidiaries, by one or more carriers and one or more subsidiaries, or by any other person or persons having such control under any indenture, 15 trust, or other agreement or arrangement with, or by means 16 of the assets of, one or more such carriers or subsidiaries. 17 The filing of an application hereunder in good faith shall 18 exempt the applicant from any obligation, duty, or liability 19 imposed in this part upon the applicant as a subsidiary until 20 the Commission has acted upon such application. The Com 13 14 21 mission may require the applicant to furnish such informa22 tion as the Commission deems necessary for acting upon the 23 application. Within a reasonable time after the receipt of 24 an application hereunder, the Commission shall enter an order granting, or, after notice and opportunity for hearing, 25 2 (Page 6) 1 denying or otherwise disposing of, such application. The Commission shall issue an order to show cause why any order 3 declaring a company not to be a subsidiary should not be re4 voked, whenever it has reason to believe that such company 5 has become a subsidiary, and, within a reasonable time there6 after, and after notice and opportunity for hearing, shall 7 revoke the order declaring such company not to be a sub8 sidiary if it finds that such company has become a subsidiary. 9 (h) The term "control" as used in this paragraph (3) 10 shall be construed, specifically but not exclusively, to include 11 the power to exercise, directly or indirectly, control or any 12 substantial influence over policies or actions. 13 14 PARAGRAPH (17), SECTION 5, INTERSTATE COMMERCE ACT (17) As used in paragraphs (4) to (16), inclusive, 15 the term ["person" includes an individual, partnership, asso16 ciation, joint-stock company, or corporation, and the term] 17 "carrier" means a carrier by railroad subject to this part. 18 19 (1) [That the Commission hereby created shall have 20 authority to inquire into the management of the business of 21 all common carriers subject to the provisions of this part, 22 and shall keep itself informed as to the manner and method 23 in which the same is conducted, and shall have the right to 24 obtain from such common carriers full and complete informa25 tion necessary to enable the Commission to perform the PARAGRAPH (1), SECTION 12, INTERSTATE COMMERCE ACT 159927-39-2 (Page 7) 1 duties and carry out the objects for which it was created; and the] 2 The Commission is hereby authorized and re 2 3 4 5 6 9 quired to execute and enforce the provisions of this part; and, upon the request of the Commission, it shall be the duty of any district attorney of the United States to whom the Commission may apply to institute in the proper court 7 and to prosecute under the direction of the Attorney General 8 of the United States all necessary proceedings for the enforcement of the provisions of this part and for the punishment of 10 all violations thereof, and the costs and expenses of such 11 prosecution shall be paid out of the appropriation for the 12 expenses of the courts of the United States; and for the pur13 poses of this part the Commission shall have power to 14 require, by subpena, the attendance and testimony of wit15 nesses and the production of all books, papers, tariffs, con16 tracts, agreements, and documents relating to any matter under investigation. 17 18 19 20 PARAGRAPHS (1) TO (7), SECTION 20, INTERSTATE COMMERCE (1) That the Commission is hereby authorized to re21 quire annual reports from all common carriers subject to the 22 provisions of this part, from all subsidiaries of such carriers, 23 and from the owners of all railroads engaged in interstate 1 2 5 8 9 The substance of this omitted clause is included in section 20 (5) (b). (Page 8) commerce as defined in this part, to prescribe the manner in which such reports shall be made, and to require from 3 such [carriers] carriers, subsidiaries, and owners specific 4 and full, true and correct answers to all questions upon which the Commission may need information. Such annual 6 reports shall show in detail the amount of capital stock 7 issued, the amounts paid therefor, and the manner of payment for the same; the dividends paid, the surplus fund, if any, and the number of stockholders; the funded and floating 10 debts and the interest paid thereon; the cost and value of 11 the [carrier's] property, franchises, and equipments of the 12 carrier, subsidiary, or owner; the number of employees and 13 the salaries paid each class; the accidents to passengers, 14 employees, and other persons, and the causes thereof; the 15 amounts expended for improvements each year, how ex16 pended, and the character of such improvements; the earn17 ings and receipts from each branch of business and from 18 all sources; the operating and other expenses; the balances 19 of profit and loss; and a complete exhibit of the financial 20 operations of the carrier, subsidiary, or owner, each year, 21 including an annual balance sheet. Such reports shall also 22 contain such information in relation to rates or regulations 23 concerning fares or freights, or agreements, arrangements, or 24 contracts affecting the same as the Commission may require; 25 and the Commission may in its discretion, for the purpose 1 (Page 9) of enabling it the better to carry out the purposes of this part, 2 prescribe a period of time within which all common carriers 4 5 3 subject to the provisions of this [part] part, subsidiaries of such carriers, and owners of railroads engaged in interstate commerce shall have, as near as may be, a uniform system of accounts, and the manner in which such accounts shall be kept. 6 7 8 (2) Said detailed reports shall contain all the required 9 statistics for the period of twelve months ending on the 10 thirtieth day of June in each year, or on the thirty-first day 11 of December in each year if the Commission by order sub12 stitute that period for the year ending June thirtieth, and 13 shall be made out under oath and filed with the Commission 14 at its office in Washington within three months after the 15 close of the year for which the report is made, unless addi16 tional time be granted in any case by the Commission; and 17 if any carrier, subsidiary, person, or corporation subject to 18 the provisions of this part shall fail to make and file said 19 20 annual reports within the time above specified, or within the time extended by the Commission, for making and filing 21 the same, or shall fail to make specific and full, true, and 22 correct answer to any questions authorized by the provisions 23 of this section within thirty days from the time it is lawfully 24 required so to do, such party shall forfeit to the United States 25 the sum of one hundred dollars for each and every day it 7 (Page 10) The shall continue to be in default with respect thereto. 2 Commission shall also have authority by general or special 3 orders to require said carriers, subsidiaries, or owners, or any 4 of them, to file monthly reports of earnings and expenses, 5 and to file periodical or special, or both periodical and 6 special, reports concerning any matters about which the Commission is authorized or required by this or any other law to inquire or to keep itself informed or which it is re9 quired to enforce; and such periodical or special reports shall 10 be under oath whenever the Commission so requires; and if 11 any such [carrier] carrier, subsidiary, or owner shall fail to 12 make and file any such periodical or special report within the 13 time fixed by the Commission, it shall be subject to the 14 forfeitures last above provided. 8 15 (3) Said forfeitures shall be recovered in the manner 16 provided for the recovery of forfeitures under the provisions 17 of this part. 18 (4) The oath required by this section may be taken 19 before any person authorized to administer an oath by the 20 laws of the State in which the same is taken. 21 (5) (a) The Commission may, in its discretion, pre22 scribe the forms of any and all accounts, records, and memo23 randa to be kept by carriers subject to the provisions of this 24 part, and by subsidiaries of such carriers, including the 25 accounts, records, and memoranda of the movement of traf (Page 11) 1 fic, as well as of the receipts and expenditures of moneys. 3 4 5 7 8 9 2 The Commission shall, as soon as practicable, prescribe, for carriers subject to this part, the classes of property for which depreciation charges [may properly] shall be included under operating expenses, and the percentages of depreciation 6 which shall be charged with respect to each of such classes of property, classifying the carriers as it may deem proper for this purpose. The Commission may, when it deems necessary, modify the classes and percentages so prescribed. 10 The carriers subject to this part shall not charge to oper11 ating expenses any depreciation charges on classes of prop12 erty other than those prescribed by the Commission, or 13 charge with respect to any class of property a percentage of 14 depreciation other than that prescribed therefor by the Com15 mission. No such carrier shall in any case include in any 16 form under its operating or other expenses any depreciation 17 or other charge or expenditure included elsewhere as a de18 preciation charge or otherwise under its operating or other 19 expenses. [The Commission shall at all times have access 20 to all accounts, records, and memoranda, including all docu21 ments, papers, and correspondence now or hereafter exist22 ing, and kept or required to be kept by carriers subject to 23 this part, and the provisions of this section respecting the 24 preservation and destruction of books, papers, and documents 25 shall apply thereto, and it shall be unlawful for such carriers 1 4 5 (Page 12) to keep any other accounts, 1ecords, or memoranda than 2 those prescribed or approved by the Commission, and it may 3 employ special agents or examiners, who shall have authority under the order of the Commission to inspect and examine any and all accounts, records, and memoranda, including all 6 documents, papers, and correspondence now or hereafter 7 existing, and kept or required to be kept by such carriers. 8 This provision shall apply to receivers of carriers and operat9 ing trustees. The provisions of this section shall also apply to 10 all accounts, records, and memoranda, including all docu11 ments, papers, and correspondence now or hereafter existing, 12 kept during the period of Federal control, and placed by the 13 President in the custody of carriers subject to this part.] 3 (b) The Commission shall have authority to inquire into the management of the business of all carriers and sub16 sidiaries, and of all controlling persons and affiliates to the 17 extent that the business of such controlling persons and affili18 ates is related to the control or management of the business 19 of one or more carriers or subsidiaries, and the Commission shall keep itself informed as to the manner and method in which the same is conducted, and shall have the right to 22 obtain from such carriers, subsidiaries, controlling persons, 23 and affiliates such information as the Commission deems 24 necessary to carry out the provisions of this part. 14 15 20 21 3 The substance of this omitted matter, except the last sentence, is included in subdivisions (c), (d), and (e) of this paragraph. |