I w of the Federal Aviation Act of 1958, in section 4(b) of the bill advise of a proceeding now pending before the Civil Aeronautics Board indicates that a clarification of section 4(b) of H.R. 4701 may be neces make plain the purpose which it is my understanding section 4(b) is det to achieve. Section 1003 of the Federal Aviation Act now enables and encourages publication of joint air-surface rates and provides for their regulation by x; board comprised of ICC Commissioners and CAB members. Section 4:5 HIR. 4701 appears to further facilitate such rates by making more expli ** powers of such a joint board and by extending its regulatory scope to in air-water carrier rates. However, the Civil Aeronautics Board presently has under considera: e ruling that would forbid any air-surface joint rates with respect to shipe picked up or delivered by any surface carrier within the terminal area of air carrier, and in another proceeding the CAB is considering expanda Z terminal areas of air carriers to a radius of 75 miles. I attach a memorandum which explains this problem in detail, but it summed up readily by observing that there is hardly a city in the United Si with a population of over 100,000 which is farther than 75 miles from, al a” served by commercial air carriers. Therefore the exclusion of shipments p up or delivered within such terminal areas would probably render jurt a surface rates inapplicable to 80 percent of the package freight in the 1%. States. As the attached memorandum explains, I doubt that the CAB would such an exclusion on the basis of section 1003 of the Aviation Act as pr enacted, because the statute plainly authorizes joint rates between sir and any “other common carriers." However, H.R. 4701 limits air carrers : joint rates only with carriers subject to I.C.C. or Federal Maritime Boni mec lation. Inasmuch as section 203(b) (7a) of the Interstate Commerce Act 3 effect of exempting highway carriage within air carrier terminal arvas I.C.C. economic regulation, unless H.R. 4701 is amended to prevent such a res there is an appreciable chance that section 4(b) of the bill will be interested to deprive shipments originating in such terminal areas from air-surfact rates and through service. In my opinion this would gravely inhibit the air transportation of sm 1'' ment traffic, whereas the Federal Aviation Act, and H.R. 4701 have the † 1o of increasing such transportation. I therefore take the liberty of forwarding a draft of an amendment to s 4(b) of H.R. 4701 The amendment seeks to make it plain that joint air suf. rates apply to all participation by air carriers and by surface common estren subject to LC.C. regulation in joint, air-surface rates and through service Mar I recommend that the Committee on Interstate and Foreign Commerce p favorable consideration to amending H.R. 4701 as indicated. As thus amer bet I certainly favor enactment of the bill. Sincerely, WILLIAM B. JOHNSON, Preaples! MEMORANDUM RE PROPOSED AMENDMENT OF SECTION 4(b) OF HR. 47 CLARIFY THE APPLICATION OF SECTION 1003 OF THE FEDERAL AVIATION A TO JOINT AIR-SURFACE RATES Section 4(b) of H.R. 4701, page 5, now sets out an amended version of vib section (b) of section 1003 of the Federal Aviation Act, 49 USC 14831 describing the through service and the joint rates which the statute rais possible between air and surface carriers. Subsection (b) of section 1003 of the Federal Aviation Act now auth Joint air-surface rates between "air carriers" and "other common carrie Section 4(b) of H.R. 4701 changes this by limiting the other common carrie ́s with whom air carriers can make joint rates, so far as overland transportate is concerned, to carriers subject to parts I and II of the Interstate Conmeny Act. Section 4(b) should be clarified to indicate that through air surface were e can combine air carriage with any transportation service rendered to a shipment by a surface carrier subject to ICC regulation, and the proposed ameti:_ of section 4 (b) of H.R. 4701 achieves that clarification. The amendment is necessary because section 203(b) (7a) of part 11 of the Interstate Commerce Act, 49 U.S.C. 303(b) (7a), provides that nothing' in part II (which gives the ICC the power to regulate interstate motor carriers) "shall be construed to include the transportation of persons or property by motor vehicle when incidental to transportation by aircraft." In henny Extension-Air Freight, 61 M.C.C, 587 (No. MC 5485 [Sub No. 11, 1963) the interstate Commerce Commission interpreted "transportation by motor vehicle incidental to transportation by aircraft" to mean, so far as freight is concerned, surface transportation within the terminal areas of air carriers. The boundaries of terminal areas of air carriers are determined by the Civi. Aeronautics Board through exercise by the Board of its power to regulate the tariffs of air carriers filed with the Board describing their terminal areas. The Board has adopted the policy of considering 25 miles as the normal radius of the terminal area of any point authorized to be served by an air common carrier of freight. practical matter, therefore, the economic regulatory provisions of the Interstate Commerce Act have not applied to the motor carriage of freight within 25 miles of any airport to or from which the freight has had an immed ately prior or subsequent haul by air, and surface carriers who limit their transportation to such operations are not subject to any economic regulation by the ICC. As a As a result of this exemption of surface carriage from ICC regulation, the Civil Aeronautics Board has recently expressed doubt whether certain joint, air surface rate agreements between a surface express company and several air carriers should be approved saying: "Our difficulty in accepting the classification of the proposed service as a through service under joint rates is compounded by the possibility that a signifi cant volume of traffe moving under the agreements will originate at or be des tined for places in the terminal areas of certain of the interchange points. Where this occurs, REA's function would seem in essence identical to pickup and delivery and/or sales services incidental to air transportation Since no part of such functions would come within the jurisdiction of the It terstate Commerce Commission, they would not appear to be the proper subject of a joint rate fiable under section 1003." (Agreements between Alaska Airlines, et al, and Railway 1.- press Agency, Inc., docket 14445, order No. E 19497, Apr. 15, 19 3, p 6) Consequently, in Docket 14445 the CAB has ordered the carriers involved with In the next few weeks to file a justification of these agreements. Thus the CAB appears seriously to entertain the possibility of ruling that surface common carriers subject to parts I, II. and 111 of the Interstate Commerce Act are forbid den to make joint rates with air carriers for shipments which either terminate or originate within 25 miles of a point where there is an airport used for a surface interchange Such a ruling, for example, would deny all shippers living within 25 miles of New York, Chicago, Los Angeles, Philadelphia, Detroit, Balti more, Houston, Cleveland, Washington, and St. Louis of the benefit of jout air sur face rates. These 10 cities are the centers of standard metropolit in statistical areas established by the Census Bureau and these 10 areas include 40 392 275 people in 1960 or 23 percent of our population. Moreover, the CAB has under consideration, in docket No 12951 the exten sion of air carrier terminal areas to a radius of 75 miles This Won'd accordi ag to the ruling on Joint rates described above as being under consideration have the effect of revoking the rights of ICC-certificated surface carriers to ti ke leant rates with air carriers any where within 75 miles of an airport cits and would probably deprive more than two-thirds of the people in United States of the benefit of such rates It is unlikely that the CAB will reject the air surface joint rate agreements, now before it in docket 14445, because section 1003(b) of the Federal Aviation Act is now considerably broader in scope than the restatement of it proposed by section 4(b) of HR 4701. Section 1003(b) now permits air carriers to “establish reasonable through service and joint rates, fares and charges with other common carriers" However, if the CAB has doubt as to the meaning of section 100g when drafted as broadly as the present statute, there is grave danger of lack of clarity in H.R. 4701, which limits air carriers to joint air-surface rates with carriers subject to the Interstate Commerce Act A statute which facilitates joint Except the provisions relating to qualifications and maximum hours of service of employees and safety of operation or standards of equipment air-surface rates would be utterly stultified if it excluded from such rate t shipments originating or terminating within 25 or 75 miles of any because such traffic would include more than four-fifths of the package fro in the country. Such an interpretation of H.R. 4701 could produce the deptim diseconomy of a shipper on Long Island, within 75 miles of La Guardia A. routing his air-surface traffic through Hartford, Conn., in order to surface-air rates, and a shipper within 75 miles of Hartford routing his t through LaGuardia Airport for the same purpose. The surface carrier inv could pick up traffic for air transportation in small towns in Connectic could pick no traffic up within the huge and teeming metropolitan ares Greater New York City, extending through New Jersey and through Westphasi County, if the air-surface interchange point were a New York City airport To avoid such an interpretation and to avoid such misallocations of ra transportation resources, it would be wise to clarify the intent of HR insofar as it revises section 1003 of the Federal Aviation Act, by providing the transportation in connection with which air-surface joint rates can be can include surface transportation described in section 203(b) (7a) of the 1-state Commerce Act as "incidental to transportation by aircraft," when pro- :< by common carriers subject to regulation by the Interstate Commerce CoTime and AMENDMENT OF SECTION 4(b) OF H.R. 4701, 88TH CONGRESS, 1ST SESS! 5 An amendment to provide that through air-surface service and joint air s rates between air carriers subject to the Federal Aviation Act and surf carriers subject to the Interstate Commerce Act may include transporta”, a service rendered by such surface carriers within the terminal areas of so t air carriers in transporting the same shipment. Be it resolved, That Section 4(b), page 5, lines 1 to 25 of H R, 4701 be amen:208 to read as follows: "THROUGH SERVICE AND JOINT RATES, FARES AND CHARGES *(b) Air carriers subject to the Federal Aviation Act of 1958, common carren subject to parts I, II, and III of the Interstate Commerce Act, as amendes, common carriers by water subject to the Intercoastal Shipping Act, Ess amended (including persons who hold themselves out to transport goois by w but do not own or operate vessels), may voluntarily establish and mathaa reasonable through service and joint rates, fares, and charges with any such common carriers in connection with the transportation of persons or je erty in interstate or foreign commerce; except that air carriers not dire ....” engaged in the operation of aircraft in air transportation (other than come: engaged in the air express business) may not establish joint rates or chats under the provisions of this subsection, with common carriers subject to lad Interstate Commerce Act, as amended, and the Intercoastal Shipping Act, 192 as amended. No common carrier subject to the Interstate Commerce Act 195/ be prohibited from participating with air carriers subject to the Federal Avust Act of 1958 in joint rates and through service solely because said part.mp by said common carrier subject to the Interstate Commerce Act sa limang i the transportation of persons or property by motor vehicle described in 2 203(b) (7a) of the Interstate Commerce Act, Title 49 United States Code tion 303(b) (7a). Any joint rates, fares, and charges thus established may canceled by any party thereto by giving thirty days' notice to the other pa or parties and by tariff cancellation notice to the agency or agencies referred i in subsection (e) of this section, notwithstanding any order that may have bees made with respect thereto under subsection (f) or (g) hereof. Hon. OREN HARRIS, NATIONAL GRANGE, Washington, DC, June 24, 19 Chairman, Committee on Interstate and Foreign Commerce, House of R. sentatives, Washington, D.C. DEAR MR CHAIRMAN: We desire to have placed in the record of bea-ng relating to H.R. 4700 and H.R. 4701, the following comments: During September 1962, a statement was made by us concerning H R and HR 11584. Please refer to page 619 of the printed record In defereace to the fact that the aforementioned bills are practically identical to those introduced during the previous session of Congress, and designed to achieve the same objective, we believe it unnecessary to add further to our ¡-revious expressions. We do, however, wish to be identified as occupying the mus ine position as that indicated in our 1962 statement. Respectfully yours, HERSCHEL D. Ni wsom, Master, Hon. OEN HARKIS, PENNSYLVANIA ŠTAI CHAM'ER OF COMMERCE, 18. House of Representatives, House Office Building, Washington, D.C. DEAR CONGRESSMAN HARRIS: As chairman of the House Interstate and Foreign Commerce Commitee, you have no doubt given considerable thought to the merits of H R. 4700, the President's bill to eliminate the power of the ICC to set minimum rates for bulk commodities and for agricultural and fisheries products. On behalf of the Pennsylvania State Chamber of Commerce, I would like to urge you to give favorable consideration to the bill, so that it may be reported to the floor and enacted into law. The chamber, along with the US. Chamber and most shippers' groups, supports the bill with certain reservations, which we urge you to take into account. These reservations may be summarized as follows The bill should make it perfectly clear that preferential, discriminatory, and predatory rates are prohibited, and that raliroads must continue to fie tariffs. Conference ratemaking should be protected as well for joint rates as for through rates. Section 3a of the Interstate Commerce Act should be retained HR. 4700 should not apply to air transportation or to minimum rates for passengers, The State chamber's position is very similar to that of the US. Chamber, and we wish to associate ourselves with the testimony of the US Chamber The position of the State chamber was taken at a recent meeting of our board of directors. The bill was the subject of extended discussion by members, many whom were thoroughly familiar with the hearings that have been held on these bills by the House and Senate. The members thus were able to decide after having heard the arguments of all interested parties. By a large margin, the board agreed that deregulation, as contemplated in H R. 4700, would benefit Pennsylvania business and industry. Yours very truly, A. L. EDMONDS, Ezccutive Director. VIRGINIA STATE. Potitry FydERATION, INC, Hon. AIRERTIS S. HARRISON, Jr., The Capitol, Richmond, Va. DEAR GOVERNOR Harrison: This is to advise you of the continuing keen interest of the Virginia State Poultry Federation and the Virginia State Feed Association in the minimum rate legislation which has been reintroduced in the 88th Congress as House bill 4700 and identical Senite bul! 1061 Many of our farm leaders believe that the future prosperity of Virginia agriculture is largely dependent upon its ability to regain its former status as a poulty producing State and to develop its caffle and bog industries. All of these agricultural industries require a vast amont of grain, much of which necessarily has to be shipped into Virginia from the large grain producing areas We feel, therefore, that if we are to be able to em.pte in Virginia with the offer Southern States in poultry and livestock på «duction we nust envoy fore favorable rates on grain and other production items used in our animal agricul ture. We feel that the interest of Virginia agrionifere will best be served by a removal of Interstate Commerce Commis ion power to set miremum rates on agricultural and bulk items shipped by rail rather than the alternate route that the President now seems willing to accept; that is, a tightening up or elimi nation of the minimum rate exemptions currently enjoyed by other modes transportation. Since it appears that one of the stiffest battles in the 88th Congress wr fought over this issue, we certainly would appreciate any support that ye office can give us in backing the principle of granting our railroads be freedom from minimum rate restrictions as is now granted to their competi This position is backed by at least 12 national farm organizations, In the Farm Bureau, the Grange, and the National Farmers Union as wel associations of fruit and vegetable growers. We shall be happy to supply you with any supporting data you may requ to back up the position we have taken on this important issue. Most sincerely yours, J. PAUL WILLIAMS, Hon. OREN HARRIS, THE GENERAL CRUSHED STONE Ca, Chairman, House Interstate and Foreign Commerce Committee, DEAR MR. HARRIS: I understand that Congress is now holding public dog": on Senate bill 1061 and H.R. 4700. As chairman of the House Interstate 2: Foreign Commerce Committee, I should like you to know of my interest; 1o legislation which has to do with transportation reforms by eliminating na rate regulations with respect to the transportation by railroads of buis ec modities and products of agriculture and fisheries. Everyone in this country is concerned with the health of our railroad indr and it is only fair that the railroads be given the opportunity to low. r. certain items to compete with trucking and other means of transportation. transportation rates affect the ultimate price to the consumer, these bijis m tend to combat inflation and, therefore, are of interest to buyers of these va products. We in industry are also interested in fair competition within the transv tion segment of our country which these bills will affect. I, therefore, dystan fully request that you and your committee favor bill H.R. 4700 and s make this letter a part of the official record of the hearings. Sincerely yours, Subject: H.R. 4700. Representative OREN HARRIS, JOHN RICE, Jr., Vice Prendust GRINNELL Corp. Providence, R.I., June 4, 1 =2 House Interstate and Foreign Commerce Committee, HONORABLE SIR: May I solicit your support to obtain enactment of HR 47% the so-called minimum-rate bill which provides for elimination of regulat c the Interstate Commerce Commission of minimum rates on commodities 15 Pla and agricultural products, carried via railroad. In order to preserve a strong railroad system, opportunity to compete equal basis with other modes of transport is of exteme importance. The roads have faced a continuous decline in tonnage each year; operated continues to shrink. Here in Rhode Island, as in many parts of the Eastern United States face ever increasing strong competition. Many of the railroad companies reach the break-even point, and with shrinking tonnage, increasing red £. are in evidence. Any opportunity to compete on a more equal basis with modes will assist the rails in remaining solvent. As a heavy user of rail serv Grinnell Corp. is interested in preserving a healthy railroad industry. In seeking passage of H.R. 4700, may I point out that the bill as pres written, should be amended to preserve the conference method of ratemaa The same position has been taken by the National Industrial Traffic Lene i Chamber of Commerce, and the Atlantic States Shippers Advisory Boa TVÅ |