September 16, 1938

Mr. Clifford Whipple Vice-President and Counsel United Electric Railways 24 Exchange Place Providence,

Dear Sir:

Reference is made to your letter of July 15, 1938, trans­ mitting to us certain information concerning the united Electric Railways Company,

From the information furnished by you, it appears that the Railways Company was incorporated in 1919 under the laws of Rhode Island, commencing operations in July 1921. In Moody’s Man­ ual of Public Utilities securities for 1937 it is stated that in June 1921, this company acquired the property of the Union Railroad Company, Providence Cable Tramway Company, Rhode Island Suburban Railway Company, and Pawtucket Street Railway Company, and that in August 1921, it acquired the "railway and physical property of The Rhode Island Company, and that in October 1921, it acquired the property of the Providence & Danielson Railway Company, it is fur­ ther stated that the Railways Company operates in the principal cities and towns of the State of Rhode Island; and that it owns and operates 99 miles of street railway lines with appurtenant con­ structions; and also operates 182 miles of^motor bus lines and 44 miles of trackless trolley lines. According to this same source, the Railways Comnany's equipment consists of 239 passenger cars, 131 motor buses, 37 trackless trolleys, 60 miscellaneous cars and 3 electric locomotives. It appears that since 1927 the Railways Company has been controlled through stock ownership by the Rhode Island Public Service Company, which is in the International Hydro- Electric System.

You state that under order of the public Utilities com­ mission of Rhode Island the Railways Company has done an interstate switching business about the head of the Providence River and on a short^BauT from The New York, New Haven and Hartford Railroad Com­ pany's Auburn, Rhode Island, station, but that the switching on the east side of the Providence River was abandoned in 1934 on authority of the Public Utilities Commission of Rhode Island, and that of the - 2 - Mr. Clifford Whipple

9.1 miles of track used for the freight received from the New York, New Haven and Hartford Railroad Company at its Auburn yard, by order of the Rhode Island Division of Public Utilities, freight service was discontinued in 1936 over 7.8 miles of the line, leaving 1.3 miles as the present trackage from such A.uburn yard. You state further that for the five months ending May 31, 1938, the freight earnings of the Railways Company were one-seventh of one per cent of the company's revenue.

You refer in your letter to a report of the Interstate Commerce Commission affecting your company and also set forth cer­ tain correspondence between your company and that Commission, in the report you cite, In the Matter of Rules and Instructions for Inspection and Testing of Locomotives Propelled by Power Other Than Steam Power, 122 I.C.C. 414 (1927), the United Electric Railways Company was listed by the Interstate commerce Commission (at page 426) as one of the carriers which "as at present operated, are street, suburban, or electric railways not operated as a part of a general railroad system of transportation", and thus one which did not fall within the scope of the locomotive-inspec- tion act, as amended.

It appears from your letter that by sometime in 1929, the interstate freight business of the Railways Company shrunk to less than one-half of one per cent of the gross revenues of the company, that representations were made to Division 4 of the Inter­ state Commerce Commission, with the request that the company be excused from filing annual reports with the Commission, and that the Commission informed the company, under date of July 9, 1929, that it was excused from the filing of annual reports "so long as present conditions continue", since then, no annual reports have been filed with the Commission. Subsequently, under date of March 20, 1930, the Commission wrote the company that this exemption would apply also with respect to monthly reports of railway acci­ dents.

In view of the foregoing data, it appears that the United Electric Railways Company is within the exemption proviso of Section 1 (a) of the Railroad Retirement Act as a street, interurban and suburban electric railway not operating as a part of a general steam-railroad system of transportation, or as a part of the general steam-railroad system of transportation, and it is, therefore, my opinion that the United Electric Railways company is not an "em­ ployer" under the Act.

Very truly yours,

David B. Schreiber Acting General Counsel HJCtak September 14, 1938