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Federal-State Administrative Relations in the Regulation of Public Service Enterprises
Published online by Cambridge University Press: 02 September 2013
Extract
Recent years have seen increasing experimentation with and reliance upon interlevel administrative collaboration for adapting our traditional practices of government to the rapid extension and elaboration of national policies. In many instances, collaboration across the levels has been based upon the well-tried device of the grant-in-aid. In others, the practices of conferring, advising, transmitting official information, and acting jointly or interdependently for the performance of governmental services have been quickened. In yet other instances where federal as well as state agencies now regulate the same areas of business enterprise, a considerable body of collaborative interlevel practice has been developed. It is with this last field, especially as the collaborative action is directed toward the regulation of public service enterprises, that we are here concerned.
Prior to 1933, federal regulation of public service enterprises had a long experience with railroads (1887), a longer experience with banks coming under the national system (1863), and a shorter experience under the Federal Reserve System (1913), and a yet shorter experience with water-power enterprises (1920). States and localities developed agencies and practices for the regulation of railroads and local transportation systems, banks, water, gas, telephone, and electric utilities, and, in the twenties, highway bus and trucking operations.
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- Research Article
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- Copyright © American Political Science Association 1942
References
1 Legalists may quarrel with this classification of bank regulation, and their legal reasons will be accepted as legal reasons.
2 For a history of I.C.C.-state relations to 1935, see National Association of Railroad and Utilities Commissioners, Proceedings, 1935 (New York), pp. 313–52.Google ScholarPubMed All issues referred to herein are published by the State Law Reporting Co.
3 Ibid., 1932, pp. 550–51, 557, for tabulations of state aëronautics regulation of that date.
4 The Securities Act and the Federal Deposit Insurance Act in 1933, the Securities Exchange Act and the Communications Act in 1934, the Motor Carrier Act, the Public Utility Act, and the Banking Act in 1935 were the congressional contributions.
5 National Association of Railroad and Utilities Commissioners, Proceedings, 1935, pp. 352–58.Google ScholarPubMed
6 Ibid., pp. 360–61.
7 Ibid., pp. 365–67.
8 Sharfman, I. L., The Interstate Commerce Commission (New York, 1931–1937), I, 82–83.Google Scholar See the excellent article by Lindahl, Martin L., “Coöperation Between the Interstate Commerce Commission and the State Commissions in Railroad Regulation,” Mich. Law Rev., Vol. 33 (1934–1935), 338–97.CrossRefGoogle Scholar
9 41 Stat. 484. Sharfman discusses the provisions in op. cit., II, 308–09.
10 Sharfman, op. cit., II, 310–16.
11 See Lindahl, op. cit., for characteristics of the joint hearing.
12 National Association of Railroad and Utilities Commissioners, Proceedings, 1935, p. 340.Google ScholarPubMed
13 Cases in which the I.C.C. increases intrastate rates over the objection of state commissions on the ground that the state-prescribed rates discriminate against interstate commerce. The name derives from the judicial decision allowing such I.C.C. orders.
14 National Association of Railroad and Utilities Commissioners, Proceedings, 1935, pp. 342–52, 372–87.Google Scholar
15 Ibid., 1937, pp. 49–52, 54–56; text at pp. 62–69.
16 Ibid., 1939, p. 170.
17 48 Stat. 548. For a thorough analysis of the genesis, and the administrative and constitutional considerations at the time of enactment, see Kauper, Paul G., “Utilization of the State Commissioners in the Administration of the Federal Motor Carrier Act,” Mich. Law Rev., Vol. 34 (1935–1936), 37–84.CrossRefGoogle Scholar
18 49 Stat. 549. See Kauper, op. cit., for considerations of conflict of office in these appointments.
19 Attorney-General's Committee on Administrative Procedure, Interstate Commerce Commission (Washington, Department of Justice, Monograph No. 24), II, 169.Google Scholar
20 49 Stat. 550. One of the few congressional recognitions of official associations, and an intimation of the congressionally anticipated relations under the act is the provision that space in the I.C.C. building, or otherwise, should be provided for the national association of state commissioners. Such space was provided in the I.C.C. Building.
21 52 Stat. 1237.
22 Interstate Commerce Commission, Annual Report, 1935, p. 74.
23 Ibid., 1938, p. 84.
24 Ibid., 1940, p. 107.
25 Ibid., 1936, p. 84.
26 Ibid., 1940, p. 115.
27 Ibid., 1937, p. 73.
28 Ibid., 1936, p. 71.
29 Ibid., p. 83.
30 Ibid., 1939, p. 117.
31 Ibid., 1936, p. 79.
32 National Association of Railroad and Utilities Commissioners, Proceedings, 1938, p. 218.Google Scholar
33 Ibid., 1936, pp. 171–89, 199–229. In more recent years National Association members were somewhat worried about jurisdictional problems, viz., the assumption of federal jurisdiction over intrastate carriers who trans-ship goods which are in interstate commerce.
34 Attorney-General's Committee on Administrative Procedure, Interstate Commerce Commission, pp. 169–70.Google ScholarPubMed
35 I.C.C., Annual Report, 1938, p. 220; ibid., 1939, p. 170.
36 Ibid., 1940, p. 37.
37 48 Stat., 179.
38 F.D.I.C., Report of Operations, 1934 (Washington, 1934), p. 3.Google ScholarPubMed
39 F.D.I.C., Report to Insured Banks, June 30, 1939 (Washington, 1939), pp. 2–3.Google Scholar
40 F.D.I.C., Annual Report, 1936 (Washington, 1937), pp. 32–33.
41 Ibid.
42 Ibid., 1937, p. 24.
43 Ibid., 1936, pp. 16–17.
44 F.D.I.C., Report to Insured Banks, June 30, 1937 (Washington, 1937), p. 3.Google Scholar
45 52 Stat., 442.
46 F.D.I.C., Report to Insured Banks, June 30, 1939, p. 2.Google Scholar
47 Ibid., Dec. 31, 1940, p. 3.
48 Ibid., June 30, 1939, p. 2.
49 48 Stat., 1073.
50 Ibid., p. 1076.
51 Ibid., p. 1080.
52 Ibid.
53 Ibid.
54 Ibid.
55 Ibid., p. 1098. This is the only authorization in the act for state participation in the regulation of any aspect of radio communication. The Commission has, in its radio licensing work, come into contact with city and state police, and with police groups. Annual Report, 1935, pp. 37–40.
56 48 Stat. 1098.
57 This view is expressed in Federal Communications Commission, Investigation of the Telephone Industry in the United States, House Document No. 340, 76th Cong., 1st Sess. (Washington, 1939), p. 569.Google ScholarPubMed
58 Annual Report, 1935, p. 66; Annual Report, 1937, p. 93. These interactions produced a negotiated agreement after there had originally been many differences. The “Telephone Division has pursued a policy of close coöperation, in all matters relating to telephone accounting, with state regulatory bodies and with the National Association of Railroad and Utilities Commissioners—particularly with the Association's Committee on Statistics and Accounts of Public Utility Companies…. The coöperation and assistance of representatives of state regulatory bodies and of the association and its committee are gratefully acknowledged.” Ibid., p. 94. Telegraph company accounts received associated treatment the following year. Ibid., 1938, p. 30. See also National Association of Railroad and Utilities Commissioners, Proceedings, 1935, pp. 362 ff.Google ScholarPubMed
59 Annual Report, 1935, p. 70.
60 F.C.C., Annual Report, 1937, p. 92. The case was American Telephone and Telegraph et al., v. U.S. and F.C.C., 14 Fed. S., 121, 299 U.S. 232. The order was upheld.
61 F.C.C., Proposed Report; Telephone Investigation (Washington, 1938), p. 770 Google Scholar; see also F.C.C., Final Report of the Telephone Rate and Research Department (Washington, 1938), pp. 71–72.Google Scholar
62 CommissionerWalker, Paul A., in National Association, Proceedings, 1935, p. 400.Google ScholarPubMed
63 Ibid., p. 403.
64 The text of the agreement is on pp. 228–33 of the Proceedings of the National Association.
65 Ibid., 1938, p. 227.
66 Ibid., 1936, p. 37.
67 Ibid., 1938, p. 150.
68 See Federal Power Commission, Annual Report, 1934 and previously. See also National Association of Railroad and Utilities Commissioners, Proceedings, 1935, pp. 362–65.Google ScholarPubMed
69 Though none of the acts administered by the Securities and Exchange Commission specifically provides for collaboration with state officials, such relations have developed at various points. Information secured by the S.E.C., from utility holding, intermediate, and service company reports based on a uniform accounting system is freely supplied to state utility regulation authorities, as is information derived from the registration statements filed with the Commission by utilities. The S.E.C. acts as a clearing-house of information regarding persons suspected of securities frauds, having files on over 35,000 such persons and providing periodical confidential releases as well as special services to state securities law enforcement authorities. Joint federal-state action in securities issuance and fraud matters occurs freely in some states, rarely in others. The S.E.C., is a member of both the National Association of Railroad and Utility Commissioners and the National Association of Securities Commissioners.
70 49 Stat. 853.
71 Proceedings, 1936, pp. 266–75.
72 Ibid., p. 269.
73 Ibid., pp. 49–56; Federal Power Commission, Annual Report, 1936, pp. 8–12.
74 Only thirty-eight of the states had authority over private electric utility rates in 1935. Federal Power Commission, Annual Report, 1936, p. 22.
76 Ibid., 1939, pp. 18–19.
77 By rule, within the authority of the federal act, the Commission is requiring annual reports—in a form arrived at by collaboration with representatives of the states—from each “private, municipal, and public corporation engaged in generating, transmitting, or distributing electricity,” and having annual operating revenues of over $50,000. For state or local government utilities, this constitutes an interlevel reporting relationship. All reports cover approximately ninety-eight per cent of the electric utility industry, and are available to the state commissions, as are analyses compiled from them. Ibid., 1938, pp. 11–12, 16–17.
78 Ibid., 1939, p. 20.
79 Ibid., 1940, pp. 11–12, 61–62, 64.
80 National Association of Railroad and Utilities Commissioners, Proceedings, 1935, pp. 429, 430.Google ScholarPubMed
81 Ibid., 1938, p. 213.
82 Ibid., 1935, p. 441.
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