section 9 of this act. Pending such readjustment, and in order to stabilize conditions during the transition period, this act shall constitute a guaranty on behalf of the United States, until such readjusted rates, fares, and charges become effective, to those carriers with which the Director General of Railroads shall have entered into contracts for compensation pursuant to the Federal control act, of an annual railway operating income equal to the annual compensation provided for in such contracts, respectively, and to carriers under Federal control at the time of the passage of this act, with which no contracts shall have been entered into, of an annual railway operating income equal to the annual compensation determined by a board of referees or by the Court of Claims pursuant to section 3 of the Federal control act, or, in the absence of or pending such determination, equal to the average annual railway operating income of each such company during the test period provided for in the Federal control act (with proper adjustments to take care of compensation for additions and betterments made during Federal control and such other adjustments as may have been, or may hereafter, during Federal control, be agreed upon between the director general and the company preliminary to making a formal contract). The Interstate Commerce Commission shall, as soon as practicable after the end of each quarter while such guaranty is in effect, certify to the Federal transportation board the amount of the actual railway operating income of the several carriers during such quarter and the amount of such guaranty, showing in the certificate the amount of the excess or deficit, as the case may be, of such income as compared with such guaranty; and the Federal transportation board is hereby authorized and directed thereupon to draw its warrants in favor of the several carriers upon the Treasury of the United States, which shall be paid out of any funds therein not otherwise appropriated, for the amount of any deficit shown in respect to it in such certificate: Provided, however, That, if during any quarter while such guaranty is in force, the railway operating income of any carrier exceeds the amount of such guaranty it shall forthwith pay such excess into the Treasury of the United States. As soon as the readjusted rates, fares, and charges hereinbefore directed to be made become effective, and the President by proclamation shall so declare, the guaranty herein provided for shall cease. SEC. 2. That the indebtedness of any carrier to the Director General of Railroads or to the War Finance Corporation existing at the passage of this act or at the end of Federal control for equipment or for other additions and betterments acquired or made during Federal control shall, at the request of the carrier, be extended without security for a period of 10 years from the passage of this act, with interest at the rate of per cent per annum payable semiannually on the 1st days of January and July of each year, and shall be evidenced in such form as shall be prescribed by the Secretary of the Treasury. Any other indebtedness of any carrier to the Director General of Railroads or to the War Finance Corporation shall, to the extent to which the same shall not be offset by indebtedness of the Director General to the carrier for compensation or otherwise, be at the request of such carrier, extended with existing security or such substitutes therefor as the Secretary of the Treasury shall approve, for a period of five years from the date of the passage of this act, with

interest at the rate of per cent per annum. The principal of any indebtedness in this section mentioned shall become due and payable at the option of the Secretary of the Treasury upon default of 60 days in the payment of any installment of interest.

(There should be a provision continuing the power of the President, through the Director General, or such other agencies as he may select, to the extent necessary to close up the affairs incident to Federal control. This should be drafted in consultation with the legal department of the Director General.)

SEC. 3. That the provisions of this act and of the act to regulate commerce as amended shall, in addition to the commerce regulated by existing acts of Congress, extend and apply to all transportation as defined in section 1 of the act to regulate commerce as amended, by means of instrumentalities of transportation engaged in interstate or in interstate and foreign commerce, of passengers and property, and to the rates, fares, and charges therefor, and practices in connection therewith, wholly within one State, and to transportation, and to the rates, fares, and charges therefor and practices in connection therewith, wholly by water by a common carrier or carriers between points both of which are in the United States, in the same manner and to the same extent as to such transportation, and the rates, fares, and charges therefor, and the practices in connection therewith, in interstate or in interstate and foreign commerce. Except as in existing law or in this act provided, the police powers of the several States as to such instrumentalities of transportation are in no way interfered with or superseded.

SEC. 4. That a board be and hereby is created and established, to be known as the Federal transportation board, which shall be composed of three transportation commissioners, who shall be appointed by the President, by and with the advice and consent of the Senate. The commissioners first appointed under this act shall continue in office for the term of two, three, and four years, respectively, from the 1st day of January next the passage of this act, the term of each to be designated by the President; but their successors shall be appointed for the term of years, except that any person chosen to fill a vacancy shall be appointed only for the unexpired term of the commissioner whom he shall succeed. The chairman shall be designated by the President and when so designated shall serve as such during his term of office as commissioner. Each commissioner shall receive a salary of $25,000 per year, payable in equal monthly installments. Any commissioner may be removed by the President for inefficiency, neglect of duty, or malfeasance in office. Not more than two of the commissioners shall be appointed from the same political party. No member of said board shall, during his term of office, hold any office or employment under any common carrier subject to the provisions of the act to regulate commerce, or own stock or bonds thereof, or be in any manner pecuniarily interested therein; and, if holding any such office or employment, or owning any such stock or bonds, or having any such interest in any such carrier, at the time of his appointment, he shall relinquish such employment or position and divest himself of all such stock, bonds, or interest before he shall enter upon the duties of such office.

Said commissioners, while in office, shall not engage in any other business, vocation, or employment. "No vacancy in the board shall impair the right of the remaining commissioners or commissioner to exercise all the powers of the board.

SEC. 5. For the purpose of the proper exercise of its functions the Federal transportation board shall have the same powers as those conferred upon the Interstate Commerce Commission by existing law in respect to the summoning and securing the attendance and testimony of witnesses, and the production of books, papers, tariffs, contracts, agreements, and documents relating to any matter under investigation; and jurisdiction is hereby conferred upon the district courts of the United States to enforce the attendance of witnesses, the giving of evidence and the production of books and other papers before the Federal transportation board, in like manner and to the same extent as under existing laws they may do in respect of matters before the Interstate Commerce Commission.

SEC. 6. The Federal transportation board shall be charged with the duty and responsibility of observing and keeping informed in respect of the transportation needs and the transportation facilities of the country generally and of each transportation situation and of representing the public interest in respect to the amount of operating revenues necessary to the adequacy and efficiency of such transportation facilities and service, and, to that end, it shall be its duty to study the financial condition and credit of all common carriers subject to the act to regulate commerce, to inform itself as to the amount of operating revenues such carriers require in order to pay the wages of labor and all other expenses of operation including taxes, a fair return on the property held for or used in the public service and to establish and maintain a credit sufficient to attract the new capital necessary in the public interest, in order that adequate and efficient transportation service and facilities may at all times be provided, which amount, as to the carriers in the several ratemaking groups hereinafter provided for, it shall from time to time certify to the Interstate Commerce Commission, and the said commission, in any proceeding before it as to rates, fares, and charges, shall, for the purposes of its decision, accept the said amount so certified as correct unless good cause be shown against it. In arriving at the amount to be embodied in its certificate, the Federal transportation board shall take a comprehensive view of each ratemaking group, and the amount of needed revenue shall be determined with reasonable reference to railroads fairly representative of average conditions therein. In any proceeding involving the level of rates, fares, and charges or which may substantially affect the revenues of the carriers in any rate-making group, it shall be the duty of the Federal transportation board to intervene and, on behalf of the public, make to the Interstate Commerce Commission, or the regional commissions, as the case may be, such representations or recommendations, with the reasons therefor, and show such cause, as it may in the performance of its duties imposed by this act, deem proper and appropriate in the public interest.

It shall from time to time make reports to Congress, accompanied by recommendations of such measures and policies as in its opinion will promote the interest of the public in respect of the efficiency of the transportation service and the adequacy of transportation facilities.

SEC. 7. The functions and powers of the Interstate Commerce Commission under existing laws, except as to accounting, as to the Federal valuation of railroad properties, and as to rates, fares, and charges, are hereby transferred to and shall be exercised and performed by the Federal transportation board.

SEC. 8. In addition to the foregoing, the following powers are hereby conferred upon the Federal transportation board:

(a) If it finds that a carrier can not, by reason of the congestion of its lines, properly handle its traffic, it shall have power to require the distribution of such obstructed traffic over other lines of roads upon such terms as between the several carriers as it may find under the circumstances to be just and reasonable; subject, in respect to the propriety of such diversion or in respect to such terms, to an appeal by any interested carrier to the Interstate Commerce Commission. If, under the power in this paragraph contained, any traffic shall be diverted from a carrier which it is ready and able to handle properly, then such carrier shall be entitled to recover from the carrier or carriers to which such traffic shall be thus diverted, the revenue accruing on such diverted traffic in excess of the actual out-of-pocket cost of transporting the same; and if such revenue shall not, as in this paragraph authorized, be awarded to such carrier by the Federal transportation board or by the Interstate Commerce Commission and duly and promptly paid, then such carrier shall be entitled to recover the same by suit or action against the carrier or carriers liable therefor under this act.

Any suit mentioned in this or the next succeeding paragraph may be brought in the district court of the United States for any district in which the principal office of any defendant carrier may be located, and jurisdiction is hereby conferred on such district court to hear and determine such suit or action, regardless of the amount in controversy.

(b) If it finds it to be in the public interest and to be practicable without impairing the ability or substantial convenience of a carrier owning or entitled to the enjoyment of a passenger terminal to handle its own business, it shall have power to require the use of any such terminal of any carrier by another or other carriers on such terms and for such compensation as the carriers may agree upon, or, in the event of their failure to agree, as the Federal transportation board may fix as reasonable and just for the permitted use, to be ascertained on the principle controlling compensation in condemnation proceedings (which compensation shall be paid or adequately secured before the enjoyment of the use is entered on), subject to the right of appeal by any interested carrier to the Interstate Commerce Commission as to such requirements and as to the reasonableness and justice of such terms. If, under the power in this paragraph contained, the use of the terminal of any carrier is required to be given to another or other carriers, and the carrier whose terminal is thus thrown open to use by others, is not satisfied with such requirement or with the terms fixed for such use, or if the amount of compensation which is fixed is not duly and promptly paid, the carrier whose terminal has thus been thrown open to use shall be entitled to recover, by suit or action against such other carrier or carriers, the damages growing out os such requirement and just compensation for the privileges awarded.

(c) In cases of serious national emergency, if declared by the President, it shall have power, on the President's order, to require the carriers engaged in interstate commerce, during the continuance of such emergency, to coordinate their facilities and to operate their transportation facilities as a unified national system on such terms as it shall find reasonable and just in the public interest with due regard to the rights of the carriers; subject, however, if the amount of such compensation is not agreed upon between the Federal transportation board, with the approval of the President and the interested carrier, to an appeal by such carrier to the Court of Claims for just compensation from the United States for such use of its properties and for any injury occasioned thereby.

SEC. 9. The Interstate Commerce Commission shall divide the continental United States into as many rate-making groups as it may deem proper and convenient in view of the similarity of transportation and traffic conditions applicable thereto.

The level of rates, fares, and charges in any rate-making group shall from time to time be adjusted so as to provide revenue sufficient to pay the wages of labor and all other expenses of operation including taxes, a fair return on the value of the property held for or used in the public service, and to establish and maintain a credit sufficient to attract the new capital necessary to meet the public need for present and reasonably prospective transportation facilities and service. In applying the foregiong rule a comprehensive view of the conditions of each rate-making group shall be taken, and the level of rates, fares, and charges shall be determined with reasonable reference to railroads fairly representative of average conditions therein.

SEC. 10. The carriers shall have power to initiate rates, fares, and charges, and, in cases where a carrier does so, schedules thereof shall be filed with the Interstate Commerce Commission, with the Federal transportation board, and with the State commissions of the several States in which such carrier operates and in which the rates, fares, and charges are applicable; and, if not suspended as hereinafter provided, such rates, fares, and charges shall become effective thirty days after the same shall be so filed, unless a shorter period in special cases shall be authorized by the Interstate Commerce Commission. The Interstate Commerce Commission may suspend, for a period of not exceeding 60 days, any rate, fare, or charge initiated by a carrier, and proceed to a hearing and consideration thereof. If no determination is reached by the commission within the period herein allowed for such suspension, the rates, fares, and charges shall be permitted to go into effect at the expiration of such period, subject to such action in respect thereto as the commission shall take on such hearing, but, in that event, the commission shall make reasonable requirements as to the payment of any amount of reparation that may thereafter be ordered by the commission within one year after the date of such final action of the commission.

Authority is hereby conferred upon the Interstate Commerce Commission to permit, consider, and determine applications for change in existing, or for the establishment of new rates, fares, and charges without the filing or presentation of full tariffs thereof.

To the extent necessary to enable the commission to meet the requirements of section 9 hereof, it may, and it shall be its duty,