merely provides a single standard against which all affected assessments must be measured in order to determine their relationship to each other. It is not a standard for determining value; it is a standard to which values that have already been determined must be compared. This standard is "true market value" (also the generally accepted standard for assessment purposes) and the requirement is that carrier property be assessed at the same proportion of such value as the proportion at which all other property subject to the same tax rates is assessed.

APPENDIX B

EQUALIZATION

The purpose of the bill is to provide relief for common carriers from discriminatory property taxes whether through assessments or through rates. The test of discrimination as applied to assessments is to show the taxes which are based upon an assessment of the carrier's property at a higher proportion of its true market value than the proportion at which other taxpayers are assessed upon their property in the same taxing district. În making this comparison, the bill contemplates the relationship between a common carrier's property and that of the "average" taxpayer in the taxing district. However, the word “average" has a precise arithmetical connotation which makes it unsuitable in this context.

For simplicity, therefore, the phrase "all other property in the taxing district" has been used as the equivalent of the property of the "average" taxpayer there. Thus the words "all other property" are to be construed as meaning property in the aggregate, and not individually as separate parcels or kinds of property. The reason is obvious since, if the latter were the case, the carrier would be entitled to look for the particular parcel of property in the taxing district which was assessed lowest of all (that is, at a lower percentage of its true market value than the percentage applicable to any other parcel in the entire district) and demand similar treatment. This is not the purpose of the legislation, for such an interpretation would merely remove discrimination against common carriers and substitute discrimination in their favor.

Likewise, it is possible that in a particular taxing district there might be a parcel of property owned by another taxpayer which is assessed at a higher proportion of its true market value than that applied to the carrier's property. In such a case, if it were necessary to consider each individual parcel of property in applying the bill's standards, it would mean that the carrier would be entitled to no relief, merely because there was one other taxpayer who suffered an even greater discrimination.

Therefore, in order to make possible the fairest comparison-that of the carrier with the hypothetical "average" taxpayer-the unit to be used in that of all parcels of property in the district, considered in the aggregate.

Proof of the composite level of assessment of this property would customarily be submitted by means of the results of a so-called Sales/ assessment ratio test. In such a test, various data-the assessed value, sales price, type of property, and other relevant factors-are

recorded from a random selection of parcels or real estate which have been sold in arm's-length sales between willing buyers and willing sellers. From eligible transactions comprising the sample various ratios are computed, with consideration being given to both urban and rural property, and a weighted average is determined and expressed in terms of an assessment ratio, or, in other words, the percentage of true market value at which the property in the sample is assessed. This result can be statistically demonstrated to be accurately representative of the level of assessment of "all other property" in the geographical area (ie., taxing district) represented by the sample.

It follows, therefore, that a carrier may obtain the relief provided for in the bill by demonstrating that its property is assessed at a higher proportion of its true market value than the proportion at which all other property in the taxing district, in the aggregate, is assessed.

Mr. MAGNUSON, from the Committee on Commerce,
submitted the following

REPORT

[To accompany S. 1653]

The Committee on Commerce, to which was referred the bill (S. 1653) to amend the Interstate Commerce Act, with respect to recovery of a reasonable attorney's fee in case of successful maintenance of an action for recovery of damages sustained in transportation of property, having considered the same, reports favorably thereon with an amendment and recommends that the bill (as amended) do pass.

The amendment is as follows: Omit the part in black brackets and insert the part printed in italic:

That paragraph 11 of section 20 of the Interstate Commerce Act (49 U.S.C., sec. 20, par. 11) is amended by inserting at the end of the fifth proviso and immediately before the sixth proviso the following: "And provided further [That if the plaintiff shall finally prevail in any action, he shall be allowed a reasonable attorney's fee, to be taxed and collected as part of the suit:] That the court, in its discretion, may allow a reasonable attorney's fee to the plaintiff in any successful action, to be taxed and collected as part of the suit, but no such fees shall be allowed to the plaintiff except upon a showing that the plaintiff has filed a claim with the carrier or carriers against whom the action has been brought, and that such claim has not been paid within ninety days after receipt of the claim by the carrier or its agent.

PURPOSE

The purpose of S. 1653 is to put the shipping public, especially small shippers, householders, and travelers in a more equal bargaining position with carriers in settlement negotiations for recovery of damages sustained in the transportation of property. S. 1653 would accomplish this purpose by permitting a successful plaintiff to recover his attorney's fees if he allowed the carrier a reasonable period of time to settle the claim.

BACKGROUND AND NEED FOR LEGISLATION

S. 1653 would assist the small shipper, and indeed any shipper with a small claim, be he a householder moving his treasured possessions, or a small grain shipper, in obtaining fair treatment from carriers in the handling of loss or damage claims arising from the transportation of property.

At present, a shipper seeking to collect a small loss or damage claim from a carrier may be precluded from recovering a just claim because of the high cost of legal fees and court charges if he must bring suit to collect.

The Interstate Commerce Commission has no power to assist small shippers by settling individual loss and damage claims between shippers and carriers. Thus, in the absence of a voluntary settlement, a shipper's only recourse is a civil action in either a State or Federal court. This avenue of relief is of little avail to a shipper with a small claim. If he employs an attorney and sues on his claim, his recovery may be less than his attorney's fees. If he chooses not to sue, he is faced with writing off the uncollected portion of his claim.

To overcome this economic imbalance favoring the carrier and prejudicing the consumer and shipper with a small claim, S. 1653 provides that if a carrier refuses to voluntarily settle a reasonable claim, he may face the economic penalty of paying a plaintiff's attorney's fees.

There is ample precedent for permitting the recovery of attorney's fees by a prevailing plaintiff. Sections 8 and 16(2) of the Interstate Commerce Act, 49 U.S.C. 8, 16(2), now permit the recovery of a reasonable attorney's fee by a successful plaintiff in certain kinds of actions arising under part I of the act. The same section which S. 858 amends was amended by this committee in 1948 as to transportation damage suits between carriers to provide for the recovery of: "the amount of any expense reasonably incurred by it in defending any action at law brought by the owners of such property."

There is precedent for S. 1653 in other legislation enacted by the Congress and the various State legislatures providing for recovery of attorney's fees in cases involving property damaged in transportation, and in antitrust and monopoly court proceedings.

The committee is convinced that there is a need for the passage of S. 1653 to insure that shippers realize justice in the handling of their transportation loss and damage claims.

The testimony indicated that S. 1653 is needed, in particular, to assist shippers of perishables in collecting their delay claims against certain eastern railroads. Western shippers of perishables depend on orderly railroad schedules in the marketing of their fruits and vege