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prior to the execution of this agreement, the Director General shall not be required to give the notice thereof provided for in paragraph (a) of this section and notice by the Company of any claim of loss in respect thereto may be given the Director General within ninety days after the execution hereof; and such claims shall thereafter be proceeded with in the manner provided in paragraph (b) or paragraph (c) of this section, as the case may be.

(e) The Director General shall reimburse the Companies for the amount of loss ascertained under this section with a proper adjustment of interest thereon.

(f) The Director General shall not acquire any motive power, cars, or other equipment at the expense, or on the credit, of the Companies in excess of what in his judgment is necessary, in addition to their then existing equipment, to provide for the traffic requirements of their own systems of transportation; but this provision shall not prevent the Director General, after the acquisition of such equipment, from using the same, or any part thereof, on the line of any other transportation system operated by him.

SECTION 9.-FINAL ACCOUNTING.

SEC. 9. (a) At the end of Federal control all the property described in paragraph (a) of section 2 hereof shall be returned to the Companies, together with all repairs, renewals, additions, betterments, replacements, and road extensions thereto which have been made during Federal control, except as any part thereof may have been destroyed or retired and not replaced, in which case the provisions of section 5 hereof shall govern and except that the Director General shall not be obliged to restore or replace property destroyed or damaged by the acts of public enemies.

(b) At the end of Federal control the Director General shall return to the Companies all uncollected accounts received by him from them and also materials and supplies equal in quantity, quality, and relative usefulness to that of the materials and supplies which he received, and to the extent that the Director General does not return such materials and supplies he shall account for the same at prices prevailing at the end of Federal control. To the extent that the Companies receive materials and supplies in excess of those delivered by them to the Director General they shall account for the same at the prices prevailing at the end of Federal control and the balance shall be adjusted in cash.

(c) The total amount of the account "Net balance receivable from agents and conductors" at the end of Federal control may be turned over by the Director General to the Company. He may also turn over all assets which have accrued out of operation; and the Company

shall, to the extent of the cash received or realized from such assets, pay and charge to the Director General all expenses arising out of railway operations during Federal control, including reparation and other claims, and may, unless objection is made by the Director General, pay and charge to him any such expenses, including reparation and other claims, in excess of the cash so received or realized. On the first day of the third month following the termination of Federal control an accounting between the parties shall be had, and so on the first of each third month thereafter. Any balance found due either party shall be payable as of the date on which the account is stated and shall bear interest until paid.

(d) At the end of Federal control there shall be paid to the Companies any balance then remaining unpaid of the cash received from them at the beginning of or during Federal control, together with any unpaid interest which may have accrued upon the same. There shall also be paid to the Companies any funds created under the provisions of this agreement except to the extent that such funds may have been properly used under this agreement.

(e) Wherever under any provision of this section there is to be an adjustment of interest, it shall be at the rate of five per cent per annum, unless the parties shall in any case agree on a different rate.

(f) After Federal control no claim by or against the Director General shall be settled by the Companies against the written objection of the Director General or the Attorney General of the United States. The conduct of all litigation before any court or commission arising out of such disputed claims or out of operations during Federal control shall be in charge of the Companies' legal force and the expense thereof shall be paid by the Companies; but the Director General or the Attorney General may, at the expense of the United States, employ special counsel in connection with any such litigation.

EXECUTION.

[Short Line Form.]

AGREEMENT BETWEEN THE DIRECTOR GENERAL OF RAILROADS AND THE

COMPANY.

AGREEMENT.

day of

--9

1918,

This Agreement made this between William G. McAdoo, Director General of Railroads (hereinafter called the Director General), acting on behalf of the United States and the President, under the powers conferred on him by the proclamation of the President, hereinafter referred to, and the

Company, a corporation duly organized under the laws of the State(s) of

(hereinafter called the Company):

Witnesseth that

(a) WHEREAS by a Proclamation dated December 26, 1917, the President, acting under the powers conferred on him by the Constitution and Laws of the United States, by virtue of the joint resolutions of the Senate and House of Representatives bearing date April 6 and December 7, 1917, respectively, and particularly by virtue of Section 1 of the Act of Congress approved August 29, 1916, entitled "An Act making appropriations for the support of the Army for the fiscal year ending June 30, 1917, and for other purposes," took possession of and assumed control at 12 o'clock noon on December 28, 1917, for war purposes of certain railroads constituting a system or systems of transportation (not including the railroad of the Company described herein), and appointed William G. McAdoo Director General of Railroads; and

(b) WHEREAS the Act of Congress called herein the Federal Control Act, approved by the President March 21, 1918, brought under Federal control the railroad hereinafter described under the following provision," That every railroad not owned, controlled, or operated by another carrier company, and which has heretofore competed for traffic with a railroad or railroads of which the President has taken the possession, use, and control, or which connects with such railroads and is engaged as a common carrier in general transportation, shall be held and considered as within Federal control,' as herein

(80)

defined, and necessary for the prosecution of the war, and shall be entitled to the benefits of all the provisions of this Act"; and

(c) WHEREAS by Proclamation, dated March 29, 1918, the President, pursuant to said Federal Control Act authorized the said William G. McAdoo, as Director General, either personally or through such divisions, agencies, or persons as he may appoint, and in his own name or in the name of such divisions, agencies, or persons, or in the name of the President, to make with the carriers, or any of them, such agreements as may be necessary and expedient respecting any matter concerning which it may be necessary or expedient to deal and to make any and all contracts, agreements or obligations necessary or expedient in connection with the Federal control of such railroads as fully in all respects as the President might do:

Now, THEREFORE, the parties hereto, each in consideration of the agreements of the other herein contained, do hereby covenant and agree to and with each other as follows:

SECTION 1. (a) This agreement shall be binding upon the United States, the Director General, and his successors, and upon the Company, its successors and assigns,

This agreement shall not be construed as creating any right, claim, privilege, or benefit against either party hereto in favor of any State or any subdivision thereof, or of any individual or corporation other than the parties hereto.

(b) Wherever in this agreement the words Director General are used, they shall be understood as designating William G. McAdoo, or such other person as the President may from time to time appoint to exercise the powers conferred on him by law with relation to Federal control.

SECTION 2. The Company's said railroad affected by this agreement shall be considered as including the following roads and properties:

SECTION 3. (a) The Company accepts the terms and conditions of said Federal Control Act and the terms of this agreement, and expressly accepts the covenants and obligations of the Director General in this agreement set out and the rights arising thereunder in full adjustment, settlement, satisfaction, and discharge of any and all claims and rights, at law or in equity, which it now has or hereafter can have against the United States, the President, the Director General, or any agent or agency thereof by virtue of anything done or omitted, pursuant to the acts of Congress herein referred to.

This is not intended to affect any claim said Company may have. against the United States for carrying the mails or for other services rendered not pertaining to or based upon the Federal Control Act. 105889°-19- -6

(b) The Company, on its own initiative or upon the request of the Director General, shall take all appropriate and necessary corporate action to carry out the obligations assumed by it in this agreement or lawfully imposed upon it by or pursuant to the Federal Control Act.

SECTION 4. It is expressly agreed and understood that the possession and use of the railroad property herein described subject to the right of the Director General to take the said property into actual possession as hereinafter provided, as a war emergency, shall remain in the Company, and the Company shall continue to operate the same, and all revenues accruing from the operation thereof shall belong to the Company, and all expenses arising out of or incident thereto, and all taxes of whatsoever character imposed thereon, or upon the Company shall be paid and borne by the Company, it being expressly agreed that unless and until the Director General shall as a war necessity take over the actual possession and operation of said railroad, he assumes no obligation for the payment of any expenses or charges in connection therewith, nor of any risk or accident in connection with the operation or control of said property. SECTION 5. All rates, fares, and charges for transportation services performed jointly by the Company and any transportation system in the possession of, and operated by, the Director General shall be divided fairly between the Director General and the Company. It is agreed that the arbitraries and percentages of joint rates, both passenger and freight, received by the Company as of January 1, 1918, shall not be reduced, and whenever joint rates have been or shall be increased, the Company shall receive as its proportion of such increased joint rates amounts in the same ratio as its arbitraries or percentages bore to the joint rates before they were increased.

SECTION 6. The Company shall receive an equitable allotment of the cars (and, where feasible, motive power) in the possession or under the control of the Director General. For the equipment thus furnished it shall pay the per diem rentals now in effect or as they may be established from time to time by the Director General, and like rentals shall be paid by the Director General to the Company for any of the Company's equipment used by him: Provided, however, That there shall be a time or reclaim allowance to roads of 100 miles or less in length, of two days, which will be assumed by the delivering road.

SECTION 7. Such arrangements shall be made for the routing over the Company's line of competitive traffic as shall insure to the Company in any month the same proportion of such competitive traffic as it had of the total of such traffic for the average of the three years, counting the calendar years of 1915, 1916, and 1917, taking

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