In this same message the President went on to say:

"For some 75 years, common carriage was developed by the intention of Ce gress and the requirements of the public as the core of our transport system. This pattern of commerce is changing—the common carrier is declining a status and stature with the consequent growth of the private and exempt vær rier. To a large extent this change is attributable to the failure of Feder. policies and regulation to adjust to the needs of the shipping and consul. g public; to a large extent it is attributable to the fact that the burdens of regulation are handicapping the certificated common carrier in his efforts meet his unregulated competition. Whatever the cause, the common carret with his obligation to serve all shippers--large or small-on certain routes at known tariffs and without any discrimination performs an essential fun.. a that should not be extinguished."

It is in connection with the implementation of this latter part of President's message that H.R. 4700, generally known as the minimum r.. bill, has been drafted. This bill proposes to repeal the Interstate Commer Commission's long standing power and duty to require the maintenan reasonable, minimum rates for the transportation of bulk commodi".-, n' fishery and agricultural products, and my statement will be contined to est sideration of this bill.

Before outlining my position on the bill, I would like to say to the comm.. that I deplore the rail versus truck fight that this legislation has enger and which I would think must have already taxed each of you to the i of your patience. I assure you, therefore, that I will try to state my post as one who has held official positions with both rail and truck compa. and is sympathetic with the problems of both.

There can be no doubt that the patterns of commerce are changing and charg fast. It has become increasingly apparent in the last 10 years that the con.. & carrier is declining in status and stature with the consequent growth of the private and exempt carrier.

There is no doubt either that certain railroads in the East and in N England are in serious financial trouble brought about by declining revenge, excess facilities, heavy passenger service deficits, unrealistic deprecias schedules going back many years, heavy tax burdens, crushing debt loads in most cases go back before the First World War, all coupled with rig labor costs made worse by featherbedding. Assuming that it is in our na". interest to help financially depressed railroads, and I think it is, we situad examine the proposed legislation with this in mind.

Speaking now of the products of agriculture, it is my opinion that the ret result of this legislation will be for the railroads to significantly diminish their gross revenue from this source with no significant increase in volume. I say this because the experience of my company in the exempt field shows most cases, that rates are not the determining factor as to how a sh..jr..t: is to move.

Consolidated Freightways is a large hauler of exempt agricultural modities originating in California, Oregon. Washington, Idaho, Montana, U az Arizona, and Colorado. Generally speaking, we handle this type of tr.5 as backhaul from Arizona to the Los Angeles Basin and to Utah; from Cair fornia, and the names States, to Minneapolis, Chicago, and the Middle « »«* and, to a smaller extent, from the Pacific Northwest to southern Calforma points. In 1962, our gross revenue from exempt traffic totalled $1,162

The important point about this to this committee is the fact that our peria reliably estimate that more than 85 percent of the exempt traffic move! ** Consolidated Freightways moved at rates higher than the existing ra:i rats and, particularly, none of the traffic moved at rates lower than rail rates. probably are asking yourselves why trucks are getting the traffe if their r are higher and this, of course, is a logical question. First of all the fix** of the truck makes it an ideal vehicle for agricultural commodities bility of equipment, coupled with ease of loading and unloading, gives tro a flexibility which the railroads find next to impossible to meet. Second trus service in the areas we serve is generally far superior to rail service and te getting better every year as equipment and highways improve. Think, ban selling on the truckman's part may be a most important factor; certainly it a of great importance.

To complete the picture of exempt operations as we see it, I should a ti our principal competition in the States I have enumerated above are (1) regular route common carriers who, like ourselves, are seeking backhaui tra

(2) irregular route common carriers who specialize in perishable and exempt traffic; (3) private carriers; (4) cooperatives; (5) wildcatters and "gy pos.”

It is my conclusion that the proposed legislation, insofar as agricultural exemptions are concerned, would not help financially depressed railroads but, instead, would decrease the revenues they now enjoy by provoking rate wars between railroads. Furthermore, I think this step of deregulation would be a long one in the wrong direction and if carried to full deregulation could have disastrous results on our common carriers, the very ones our national interests require we endeavor to strengthen.

Insofar as the bulk commodities aspect of this bill is concerned. I cannot sak as authoritatively about this as I have spoken with respect to the agricul tural and fishery exemptions. It does seem to me, however, that the alternative suggested originally, and then reiterated by the President, namely, that of placing all bulk movements under regulation, is the wisest choice to achieve timlity.

Rather than go the route of deregulation, I think a much more realistic principle which could be adopted as a national policy and which, in my estimaton, would help all common carriers, rail, truck, and waterway alike, would be to adopt a principle that all for hire movements be subject to regulation.

It is my carefully considered opinion that the problems of common carriers tolay have not been because of regulation but because certain types of carriage are exempt from regulation. I believe it to be in our national interest to endeavor at this time to eliminate this defect by putting all for hire transportat.on before a single regulatory body,

In summation, therefore, I believe that this bill would (a) not help the railreads but would cause them to lose revenue through destructive rate wars, and (b) be a long step down the road to complete deregulation which would be disastrous to the entire common carrier industry.

For these reasons I am opposed to the bill as drafted and suggest that serious consideration be given to the adopting in principle the idea that all for hire transportation be made subject to regulation.

STATEMENT OF C. E. WIDELI, INDUSTRIAL TRANSPORTATION CONSULTANT,
NASHVILLE, TENN.

My name is C. E Widell, industrial transportation consultant, with offices at 102 Stahlman Building. Nashville Tenn.

I have been engaged in transportation matters for industry in the South the past 45 years, and prior thereto in the Middle West for period of 2 years, comprising a period of 50 years in industry

During that entire period I have served as traffic department head and as consultant to large and varied industries. For many years I have served as transportation director of the Tennessee Manufacturers Association, a position I still hold. I appear here in my own capacity and also in behalf of coal operators in the southern Tennessee coalfield

I am a registered practitioner before the Interstate Commerce Commission, with active practice during the past 40 years in practically all phases of rate structure work affecting industry under the Interstate Commerce Act.

HOUSE BILI HR. 4700

Exemption from minimum-rate control

To state our position simply as opposed to what it is here proposed to do to the most vital part of section 1 of the Interstate Commerce Act there comes to mind the old proverb of burning down the barn to rid the building of unwelcome guests This seems to be what we are proposing to do here in the name of equality.

What Congress should do is the reverse It should bring the exempted waterway bulk commodities and highway exempt commodities except from farm and fisheries to first primary markets ut der the same regulation as at present by rail, and this in the public interest which is paramount.

New paragraph 23 to section 1

It reads in part as follows:

the Commission shall have no authority or

power to determine that such a rate, fare, or charge is lower than a reasonable minimum rate, fare, or charge." (Italics supplied. )

To throw the light of day on such wording brings into sharp relief the ver antithesis of the national transportation policy of 1940. To buy “equal” the price suggested here is unthinkable and contrary to the very public int” it purports to serve. It violates the letter as well as the spirit of the act. Just because we have neglected and condoned the failure to bring t commodities by waterways and highways under reasonable regulation bu Commission, is certainly no excuse for compounding the injury to the nai. economy under which it is already laboring.

If rail carriers are to be permitted to charge lower than minimum reascord' = rates below the out-of-pocket costs on bulk commodities, how will the revers deficits be made up and by whom? The answer is simple-by other sh; It becomes not so much a question of what the rail carriers would or w not do under the new paragraph 23: Rather it is what the law says they e do. This represents a return to the jungle days of the 1880's, which euim.na's in the sorely needed minimum provisions of the 1920 act, and which ti, rformed the congressional reasoning in the 1940 national transportation poi-“ Extent of the bulk commodity movement

Proponents of the new paragraph 23 have never stopped to realize the ! extent of what is actually involved in the term "commodities in buik' 7 rail commodity statistics report released by the Commission as stateme: N 62100 shows the following figures for the year ended December 31, 101 ↑ the whole country:

By one stroke of the pen we are removing from the Commission any erg over the revenues of one-half of the total tonnage of the products of agr. u group and nine-tenths of the total tonnage of the products of mines group account for more than 40 percent of the total revenues on all agricultur,' nets and 87 percent of total revenues on all products of mines in the U: States,

The bulk commodities of these two groups alone account for more than half of the entire rail tonnage in this country and more than one-fourth of total rail revenues on all commodities in the United States. This means more than $2 billion of rail revenue is removed from under the watchful. the Commission.

But, even more, the new paragraph 23 (1) definition of commodities ir would include such commodities as scrap iron, pig iron and others w wrappers or containers and received and delivered by the carrier withent portation mark or county," including also all liquid commodities in ʻik resulting damage to the national economy is incalculable.

The sinister aspect of the matter is illustrated by what the rail carrers 1° doing today in exactly the like circumstances envisioned by the new parag. 23. viz: The unprecedented low levels of section 22 rates applied on Governmen traffic on which it is asserted the Commission has "no authority or power

determine that such a rate, fare, or charge is lower than a reasonable minimum rate, fare, or charge." That this imposes an undue burden on other traffe and other shippers is of course self evident. Because of this, Congress has repeatedly been asked to repeal section 22 of the act. Instead, we are here compounding the injury to the Nation's commerce and its shippers

Retention of sections 2 and 3 provisions

To qualified practitioners before the Commission it is evident, and to this I would respectfully direct the committee's attention, that to remove the Commission's jurisdiction over rates below a reasonable minimum basis under see. tion 1 of the act would, for all practical purposes, devitalize and render inoperative the discrimination provisions of section 2 and the undue prejudices and preferences of section 3 of the act. It would effectively repeal the Commission's power and authority under section 15(1) which rests on the minimum rate provisions of section 1 as grounds for the removal and abatement of sections 2 and 3 violations by the Commission. We have nothing to take its place.

And, what is of most significant importance, removal of the Commission's powers over unreasonable minimum rates makes a farce of the congressional declaration expressed in the 1940 National Transportation Policy respecting revenues sufficient to enable the carriers to meet all the needs of the commerce of the United States and of the national defense.

Section 5a and antitrust lawes

The removal of section 5a protection from carriers and shippers in the ordinary course of rate negotiations, is a tragic mistake. But it emphasizes the dangerous trend away from the time-honored regulation of rail, waterway and highway transportation by the Interstate Commerce Commission which stands first and foremost in the public mind among the regulatory bodies created by the Congress, and whose hands should be strengthened rather than weakened. We strongly urge disapproval of House bill HR 4700

TRANSPORTATION ACT OF 1963 (HR 4701)

Kates on Government property

With all respect for your honorable committee and Members of the Congress, we submit that the time has come for Congress to right the wrongs done private industry and shippers of this country by the outlaw provisions of section 22 of the act. In all good conscience it should be repealed, and rewritten to cover only matters of national defense

Section 9 of this bill proposes certain amendments of section 321 of title III. part 11, of the Transportation Act of 1940 (49 U.S.C. 65). The title of section 321 reads:

“Rates on Government Traffic Government To Pay Full Rates"

This title is misleading and, in fact, deceptive. It doesn't mean what it says The first three lines of the act completely emasculate the provision that at long last the Government will have to pay "the full applicable commercial rates" The catch is in the words, “but subject to the provisions of * • • section 22 of the Interstate Commerce Act."- Will Rogers jokingly once said, "when Congress jokes it is a law, but often the law is a joke." Aside from this humorous phílosophy, it is apparent that what Congress says in one breath and unsays in the Dext borders on a strange philosophy of regulation

We respectfully propose the following amendment of section 321 by: (la) Striking out in subsection (a) the words: "but subject to the provisions of sections 1(7) and 22 of the Interstate Commerce Act, as amended ́and substituting therefor the following

"But subject to the provisions of section 167) of the act, and of section 22 only on Government property used for the national defense and purposes of war and to maintain the peace."

There is doubtless much with what we may agree in HR 4701, but, on the other hand, there is much that is contrary to the interests of industry in this country and that far outweighs the good. Experimentation of the kind exposed bere may be something to conjure with in academics, but not in the real life of the Nation's commerce. Accordingly we urge the rejection of HR-4701 as written subject, however, to the adoption of aforesaid proposed amendment to section 321 of title III part II of the Transportation Act of 1940 (49 US C. 65).

20 516 63 pt 2- 32

STATEMENT OF EDWIN N. YEARY, PRESIDENT, MOTOR COMMERCE ASSOCIATION, Iv WASHINGTON, D.C., AND PRESIDENT OF YEARY TRANSFER CO., Inc., Laxis-7-5

KY.

Mr. Chairman and members of the committee, my name is Edwin N. Year i am president of the Yeary Transfer Co., Inc., of Lexington, Ky. I am 16 president of the Motor Commerce Association, Inc.

The Motor Commerce Association, Inc., is a nonprofit organization ded to preserving and fostering the interests of those persons who operate pursazi to exemption provisions of the Interstate Commerce Act and of persoas 12 utilize transportation services rendered under such provisions. The mende ret, of the association is composed of both “exempt" motor carriers and shippers at producers.

The Yeary Transfer Co. is a motor carrier engaged in the interstate tratar tation of fertilizer and many different agricultural commodities and proces A portion of our operations are conducted pursuant to certificates of 1. convenience and necessity issued by the Interstate Commerce Commission the bulk of our revenue is derived from operations conducted pursuant to “ɔ exemption provided by section 203(b) (6) of the Interstate Commerce At This statement in opposition to H.R. 4700 and certain portions of HR (** is offered on behalf of both the Motor Commerce Association, Inc., and Yeary Transfer Co.

DEREGULATION OF MINIMUM RATES PROPOSED BY H.R. 4700

Section 1 of H.R. 4700 would amend the Interstate Commerce Act so se provide that the Interstate Commerce Commission shall have no “a or power" to determine that rates, fares or charges for the transportation < agricultural, fishery or bulk commodities or passengers is "lower than a reable minimum rate, fare or charge.”

It is our understanding that this proposal is designed to eliminate ties" which are alleged to exist between motor, water, and rail carriers. T alleged "inequalities" between motor and rail carriers are said to stem fro the facts that:

1. Section 203(b) (6) of the Interstate Commerce Act exempts from ecieve regulation by the Commission "motor vehicles used in carrying property of sisting of ordinary livestock, fish (including shell fish), or agricuitural eras ing horticultural) commodities (not including manufactured products theron " if such motor vehicles are not used in carrying any other property, or passe Lam 1 * for compensation"; and

2. No comparable exemption is provided for rail "vehicles" used in transgen ing the same commodities.

We emphatically deny that any inequality exists between rail and motor qa riers under the present statutory provisions. This is true because the ex----7 provided by section 203(b)(6) runs to vehicles and not to persons or oTEVE 2o tions. Any person or organization may avail itself of the exemption from de by that section. There is absolutely no prohibition against railroads operatio motor vehicles in the transportation of agricultural or fishery pro-in} **** the exemption provided by section 203(b) (6) if they see fit to do so. The ext tion of certain motor vehicles from economic regulation provided by set 203(b) (6) does not in any way discriminate against rail carriers equality that may exist in practice is due to the railroads' unwillingness to pe vide a service for the movement of agricultural and fishery products by me motor vehicles. The power to remove any such inequality rests entirely r hands of the railroads themselves. Since no statutory inequality exists, " is no need to amend the Interstate Commerce Act as proposed by stini HR. 4700. Therefore, this proposal should not be adopted.

Ars

We are opposed to removal of the Commission's power to find rail rates at plicable on movements of agricultural and fishery products unlawful as he i below a reasonable level. However, if Congress nevertheless determines 11: this action is desirable, it is imperative that adequate statutory prov‚«i «q« le incorporated to prevent destructive or predatory rate practices.

The need for such statutory safeguards arises from the fact that rail st riers, with their broad base of operations and financial resources, could meta vise reduce rates an agricultural and fishery products to unduly low levels order to kill off competition afforded by exempt motor carriers while recORD E losses from other and less competitive traffic. In contrast, exempt carriers kat