With respect to this policy question do you believe an industry should meet part of the cost of its own regulation? Mr. CLARKE. As a policy matter I would say "No, they should not." UNITED STATES SENATE, COMMITTEE ON APPROPRIATIONS, February 18, 1948. Hon. CHARLES D. MAHAFFIE, Interstate Commerce Commission, Washington, D. C. DEAR COMMISSIONER MAHAFFIE: Recently, representatives of some of the petroleum pipeline companies called upon me to discuss bringing the valuation of their pipelines down to date. They explained this was highly desirable to them because the legality of payment of dividends based upon the valuation was an important issue. They were parties to the consent decree of December 23, 1941. In the course of the conversation they stated that if it were possible for them to do so, they would meet the expense of bringing these pipeline valuations down to date-at least to a later date than is now the case. As I recall the remarks by the petroleum company officials, they said "we would be glad to pay twice what it would cost to do this job." In the course of our telephone conversation this morning I mentioned this fact and you thought it might be possible to frame some sort of a provision for the independent offices appropriation bill that would let these parties of interest pay the costs. If you can frame such an amendment and will send it to me, I will submit it to my committee. I have received your letter of February 18 with the accompanying memorandum from the Bureau of Valuation. With my best wishes, I am Cordially yours, CLYDE M. REED. FEBRUARY 24, 1948. Hon. CLYDE M. REED, Chairman, Subcommittee on Independent Offices Appropriation Bill, United States Senate, Washington, D. C. DEAR SENATOR REED: In your letter of the 18th you suggested that I attempt to frame a provision for incorporation in the independent offices appropriation bill which would permit petroleum pipeline companies to pay the cost of bringing the valuation of their pipelines down to date. I have given this matter considerable thought and have also discussed it with some of our people here who are more familiar with matters of this type than I. The nearest approach to providing in an appropriation bill for the payment to the Government for services performed that I have been able to locate is in the Department of Agriculture Appropriation Act, 1948 (Public Law 266, 80th Cong.), copy of which I attach for your convenient reference. On page 10 provision is made under "Meat Inspection" for payment to the United States in accordance with regulations prescribed by the Secretary of Agriculture and at rates and fees to be fixed by him which shall be paid by every person, firm, public agency, or other organization furnished inspection or service under said laws. A working capital fund of $5 million without fiscal limitation to be known as the "meat inspection fund" is appropriated to defray the expenses of such inspection or service with the further proviso that the payments received for such service are to be deposited in this fund. I also find that title 15, United States Code, section 180 (a), authorizes the Department of Commerce, in the discretion of the Secretary of Commerce, upon the written request of any person, firm, or corporation, to make statistical studies relating to foreign trade, domestic trade, and other economic matters falling within the province of the Department of Commerce; to prepare from its records special statistical compilations, and to furnish transcripts of its studies, tables, and other records upon the payment of the actual cost of such work by the person, firm, or corporation requesting it. Section 192 of the same title provides that all money received by the Department of Commerce in payment of the cost of work under section 189 (a) of this title shall be deposited in a special account to be administered under the direction of the Secretary of Commerce. These moneys may be used, in the discretion of the Secretary of Commerce, and notwithstanding any other provision of law, for the ordinary expenses incidental to the work and/or to secure in connection therewith the special services of persons who are neither officers nor employees of the United States. Under section 189 (a) cross-reference is made to rules and regulations for the enforcement of this section under section 601 (d) of Title 5-Executive Departments and Government Officers and Employees. There has also just been reported out by the House Committee on Interstate and Foreign Commerce H. R. 4112 which authorizes the Secretary of Commerce to receive from States and political subdivisions thereof such funds as may be contributed by them to be expended in connection with funds appropriated by the United States for the preparation, issue, and dissemination of weather reports, forecasts, and warnings, and of river and flood reports and warnings, etc., whenever such work and expenditures may be considered by the Secretary of Commerce, on recommendation of the Chief of the Weather Bureau, as advantageous to the public interest. A copy of H. R. 4112 and report of the committee is attached for your information. The last laws referred to seem to have for their purpose the payment to the Government for performing services for others which is not the normal function of these agencies. Under section 19a (f) of the Interstate Commerce Act, it is provided that— "Upon completion of the original valuations herein provided for, the Commission shall thereafter keep itself informed of all new construction, extensions, improvements, retirements, or other changes in the condition, quantity, use, and classification of the property of all common carriers as to which original valuations have been made, and of the cost of all additions and betterments thereto and of all changes in the investment therein, and may keep itself informed of current changes in costs and values of railroad properties, in order that it may have available at all times the information deemed by it to be necessary to enable it to revise and correct its previous inventories, classifications, and values of the properties; and when deemed necessary, may revise, correct, and supplement any of its inventories and valuations." It will be observed that under this section the Commission is required to perform certain duties. Because of lack of appropriation we have not been able to perform all the duties required, and the question you suggest is whether a provision should be inserted in the appropriation act permitting or requiring the pipeline companies to pay to the Commission the cost of performing the work to bring the valuation of their pipelines down to date. It Under the above section, however, the Commission is not only required to value the pipelines, but also the property of other carriers subject to part I of the Interstate Commerce Act which, of course, includes the railroads. would seem to follow that if the pipelines are required to bear that expense other carriers subject to part I of the act should likewise bear the cost of bringing the inventories of their respective properties down to date, and that this should be done by an amendment to section 19a rather than by having a provision to accomplish that purpose inserted in the appropriation act. The amount necessary on an annual basis to bring the inventories of pipelines down to date is obviously so small ($60,000 per year as estimated by our people) as to make it impracticable and expensive to set up the necessary bookkeeping and other arrangements to carry it out. I therefore doubt the advisability of attempting to have the pipeline companies defray the expenses incident to it. Rather it would seem that if the Congress agrees that this valuation work ought to be done, a sufficient appropriation should be made for that purpose. I have not, in the foregoing, discussed the question of policy involved in having an industry meet part of the cost of its own regulation. Yours very try, CHARLES D. MAHAFFIE, Commissioner. Mr. HARKINS. It is true, is it not, that although the ICC does not accept funds from the pipelines, in order to hire personnel to value the carriers' properties, the ICC does accept from the pipeline companies loans of personnel for this purpose. Mr. CLARKE. We direct pipeline companies to cooperate and aid the Commission in its valuation work, and in carrying out that pro vision of the act they do make certain personnel available from time to time to assist in this work. Mr. HARKINS. In other words, the answer is that the ICC does accept loans of personnel from carriers to assist in valuation work. Mr. CLARKE. I wouldn't say that they are loans of personnel. It is assistance they are required to render. The CHAIRMAN. You avail yourself of the personnel when it is essential to carry out the purposes, your purposes under the act. Mr. CLARKE. Yes, sir. Mr. HARKINS. Chairman Clarke, Congress has indicated in its appropriations reports that valuation work for oil pipelines be curtailed, has it not? There have been in the past indications of this interest? Mr. CLARKE. It has been indicated by the reduction in appropriation. Mr. HARKINS. Mr. Chairman, I would like to read The CHAIRMAN. That is the best kind of indication. Mr. HARKINS. From a report of the independent offices appropriations bill for 1952 dated April 27, 1951. On page 17, discussing the Interstate Commerce Commission's request for appropriations: During the hearings on the bill, the committee was advised that reductions in the Bureau of Valuation could be made with less public harm than in any other activity. The committee has therefore recommended a reduction in this activity and in 2 or 3 other branches of the service, and has recommended increases in 2 instances where it believes additional funds can be advantageously utilized. There follows a table which sets forth a comparison of the appropriations. On August 14, 1951, report No. 869 of the House of Representatives on the Independent Offices Appropriation Bill of 1952, on page 10 with respect to the Interstate Commerce Commission the conference report states: No part of the increases for the valuation of pipelines or railroads. Similarly in report No. 753 of the independent offices appropriation bill for 1952 issued July 24, 1951, in a conference report on the independent offices appropriation bill, the report states on page 9: No part of the increase is for the valuation of pipelines or railroads. So as well as Congress authorizing appropriations for valuations in the past Congress has also indicated that valuation work should be curtailed. I offer these reports for the record. The CHAIRMAN. They will be accepted. (The documents referred to are as follows:) [H. Rept. No. 384, 82d Cong., 1st sess.] INDEPENDENT OFFICES APPROPRIATION BILL, 1952 The Committee on Appropriations submits the following report in explanation of the accompanying bill making appropriations for the Executive Office and sundry independent executive bureaus, boards, commissions, corporations, agencies, and offices for the fiscal year ending June 30, 1952, and for other purposes. SCOPE OF THE BILL The bill provides appropriations for the Executive Office of the President and sundry independent offices estimated for in the independent offices chapter of the 1952 budget, pages 46 to 178, inclusive, the General Services Administration, pages 240 to 266 of the 1952 budget, the Housing and Home Finance Agency, pages 268 to 343, estimates for maritime activities, Department of Commerce, pages 511 to 517 of the budget, and estimates for the Inland Waterways Corporation of the Department of Commerce, pages 533 to 538 of the budget. The committee also considered supplemental estimates contained in House Documents 49 and 66. APPROPRIATIONS AND ESTIMATES A tabulation appears at the end of this report giving a comparative statement of appropriations for 1951 (as reduced by Sec. 1214), with budget estimates and amounts recommended in the bill for 1952. A summary of the totals in the tabulation is as follows: Comparative statement of appropriations for 1951 (as reduced by sec. 1214), with budget estimates and amounts recommended in bill for 1952 pendent establishments. $11, 817, 311, 702 $6, 661, 667, 465 $6, 014, 218, 540-$5,803, 093, 162-$647, 448, 925 Title II, Department of Commerce, maritime activities... Total..... Other reductions: Rescission of contract authorization for public works advance planning.. -13, 100, 000 -10, 500,000 -57, 300, 000 Total savings recommended by the Committee... 746, 800, 025 The committee is of the opinion that the foregoing figures speak for themselves. Substantial reductions under the estimates have been recommended in practically every item, and it has been the goal of the committee to reduce estimates below the 1951 appropriations as well as the estimate itself wherever possible. The committee is pleased to report a reduction of $5,760,942,892 under 1951 appropriations, as shown in the above tabulation. This decrease is due in large part to the omission of a request for funds for strategic and critical materials for which $3,038,548,370 was appropriated for the fiscal year 1951. Reductions in funds required for the atomic energy program and funds necessary to finance veterans' benefit programs account in large part for the remainder of the decrease under 1951 appropriations. FEES AND CHARGES The Committee is concerned that the Government is not receiving full return from many of the services which it renders to special beneficiaries. Many fees for such services are specifically fixed by law, and in some cases, it is specifically provided that no fees shall be charged. In other cases, however, no fees are charged even though the charging of fees is not prohibited; and in still others fees are charged upon the basis of formulae prescribed in law, but the application of the formulae needs to be reexamined to bring the actual charges into line with present-day costs and other related considerations. It is understood that other committees of the Congress have interested themselves in this matter and that studies now are under way which may result in further legislation to require that adequate consideration be received for such services. However, such studies are necessarily time consuming and the required legislation may not be enacted for a considerable period. Accordingly, the Committee has inserted language in the bill (Title V, page 60) which would authorize and encourage the charging or increasing of fees to the extent permitted under present basic laws, but which would in no way conflict with studies now under way to effect changes in such basic laws. It it estimated that in 1952 the Government will receive more than $300,000,000 in fees from sources of the type here under consideration. It seems entirely possible that many of these fees could be raised, and that fees could be charged for other services of similar types in cases where no charges is now made, to the extent that the Government might realize upwards of $50,000,000 additional revenue. The bill would provide authority for Government agencies to make charges for these services in cases where no charge is made at present, and to revise charges where present charges are too low, except in cases where the charge is specifically fixed by law or the law specifically provides that no charge shall be made. It is not the Committee's intention in including this provision to disturb existing practices with respect to charges for postal services, sales of power, or the interest on loans by the Government. INTERSTATE COMMERCE COMMISSION The committee considered estimates totaling $11,542,000 for the Interstate Commerce Commission. It has included in the bill a total of $10,759,470 which is a reduction of $782,530 under the 1952 estimates and is $648,730 less than funds available during the current fiscal year. General expenses.-The bill contains $9,069,870 for salaries and expenses which is a reduction of $753,130 in the budget estimate and is $648,730 less than funds available for the fiscal year 1951. The committee has made reductions totaling $1,040,820 in connection with several items and it has provided additional funds for two other activities, amounting to $287,690. During hearings on the bill the committee was advised that reductions in the Bureau of Valuation could be made with less public harm than in any other activity. The committee has, therefore, recommended a reduction in this activity and in two or three other branches of the service and has recommended increases in two instances where it believes additional funds can be advantageously utilized. A breakdown of the reductions and increases is set forth below as follows: Item: Proposed increase by Budget over funds available for 1951----- Ten automobiles_-- Travel, printing and reproduction, other contractual services, Total reduction___. Reduction $218, 190 375, 380 311, 330 14,000 121, 920 1,040, 820 Item: Miscellaneous essential activities of the Commission.......... Total increase__ Net reduction___. Increase 187,690 100,000 287.690 753, 130 Railroad safety and locomotive inspection.-The committee has recommended $983,000 and $706,000 respectively for these two activities. The amounts recommended will provide funds identical to those available for the current fiscal year. [H. Rept. No. 869, 82d Cong., 1st sess.] INDEPENDENT OFFICES APPROPRIATION BILL, 1952 The committee of conference on the disagreeing votes of the two Houses on the amendments of the Senate to the bill (H. R. 3880) making appropriations for the Executive Office and sundry independent executive bureaus, boards, commissions, corporations, agencies, and offices, for the fiscal year ending June 30, 1952. and for other purposes, having met, after full and free conference, have agreed to recommend and do recommend to their respective Houses as follows: |