While the change suggested in this paragraph might remove the apparent conflict, the intention of the proviso in the proposed pargraph (23) is not entirely clear to us.

4 Section 3 of the bill would amend section 418 of the act to allow freight forwarders to use common carriers engaged in transportation exempted under the provisions of proposed section 1(23). The exemption, contained in proposed new section 1(23), relates only to minimum rates, and thus would not affect motor carrier transportation of agricultural commodities described in section 213(b)(6). Since proposed new section 1(23) exempts, as to minimum rates, The transportation of these commodities by all carriers, it is not clear whether h. amendment of section 418 would allow freight forwarders to use exempt ... carriers for these commodities. We believe clarification is needed. In a-1.tition, the drafters of the bill apparently inadvertently overlooked the prior mendment to section 418 of the act in which reference was made to the Alaska Railroad and common carriers serving Alaska and Hawaii. The amendment id therefore, merely change the third from the last clause to read: “comn carriers engaged in transportation exempted under the provisions of section 1-23 or 303(b) of this Act ;".

The Honorable OKEN HARRIS,

APRIL 29, 1963.

Chairman, Committee on Interstate and Foreign Commerce, House of Representatives, Washington, D.C.

IFAR CHAIRMAN HARRIS: This is in response to your letter of March 16, 1963, requesting comments on a bill, H.R. 4701, introduced by you, to provide for strengthening and improving the national transportation system, and for other pes. This matter has been considered by the Commission, and I am authorized to submit the following comments in its behalf:

Except for certain changes hereafter noted, H.R. 4701 is substantially the same as Hi R. 11584, introduced by you in the 87th Congress, to implement various tions of the President's transportation message to Congress on April 5, The latter bill, as you are aware, was the subject of detailed testimony ented on behalf of the Commission by former Chairman Murphy, during the bearings before your committee last year. In this circumstance, and to avoid burdening the record, we shall contine our present comments to the more salient aspects of H.R. 4701. At this point, however, we believe it appropriate to observe that H.R. 4701, like its predecessor, H.R. 11584, includes a number of provisions which have been recommended for enactment by this Commission in the past and that, with the exceptions noted herein, we approve and support this bill

For convenience of reference, the topic headings contained in the bill will be usexj to caption our discussion of the various sections therein.

EXPERIMENTS BY COMMON CARRIERS IN RATE, CLASSIFICATION, AND DOCUMENTATION

SYSTEMS

In general, section 2 of HR. 4701 would empower the Interstate Commerce mission, as well as the Civil Aeronautics Board and the Federal Maritime umrin.ission, to authorize common carriers subject to their jurisdiction to exrenit, under the agencies' supervision and control, with new service comhur.ations or arrangements, simplified documentation, and simplified rate bases and freight classifications. These experiments could be proposed by the carriers, 2 11ers, or the regulatory agencies, and could involve individual carriers, carrers of the same mode, or of different modes. The participation of carriers and shippers would, however, be strictly on a voluntary basis Where joint en by two or more regulatory agencies would be required, such action would be taken by the joint boards provided for in the Federal Aviation Act of 1958. I like last year's bill, however, H.R. 4701 affirmatively indicates that the regulatory agencies would not be required to approve all proposed rates merely

12 they are labeled as experiments, but would be authorized to reject those which would have a seriously harmful effect upon shippers, the general public, of other carriers. This has been accomplished by the substitution of the permissive word "may" for "shall" in the first sentence of section 2(b).

In view of this substitution, the cause for concern previously expressed by This Commission has been removed. Accordingly, we endorse and recommend enactment of section 2.

RIGHT TO SHIP VEHICLES OR CONTAINERS ON CARRIERS OF OTHER MODES W
PRICE DISCRIMINATION

Under section 3 of the bill, common carriers subject to parts I, II, and III f the act would be prohibited from unjustly discriminating against any shutter or carrier, regulated or not, with respect to service or rates in transporting loade or emptly vehicles or shipping containers. The announced purpose of Ls we tion is to provide the so-called carrier shipper, as in piggyback operations. the same competitive opportunities as noncarrier shippers.

We agree with the basic objective of section 3. In fact, the Commissing ba long favored, and has itself sought to encourage, greater coordination of tåtransportation facilities of the various modes to the end that the inherent nival tages of each may be utilized in the most efficient manner. In this connectiva er have recommended in our current annual report to the Congress certain aress ments to the act which would permit us in proper cases, after a hearing, to t quire the establishment of through routes and joint rates between motor coz = " carriers of property and between those carriers and common carriers by r. express, and water. Bills to give effect to this recommendation were recent, introduced as H.R. 2088 and S. 676 in the House and Senate, respectively

In addition, and of particular importance here, has been the institution be “hi Commission of a formal investigation covering all aspects of piggyback seriz Er parte 230, substituted service-charges and practices of for-hire carriers freight forwarders (piggyback service). Using this proceeding as a velucie intend to review thoroughly and to evaluate and resolve (or, where necesa” formulate appropriate legislative recommendations concerning) the 1870s sented by the rapid acceleration in the growth of coordinated motor-rail ties under the various piggyback plans.

At a prehearing conference held on October 9, 1962, proposed rules apt to the various trailer-on-flatcar services were formulated by the Commiss; a L released to the parties. Since that time, numerous interested shipp»r«, roads, motor and water carriers, and other interested persons have su.t. detailed and highly informative written representations concerning all a of the proposed rules. The last of these pleadings was filed in early Apr this year, and every effort is being made to reach a prompt decision on 2. the issues presented.

In these circumstances, and pending the determination of the investigatioe pre ceeding in Er parte 230, we lack sufficient information upon which to take as a formed position on section 3 of the instant bill, the ramifications of which are reaching and could drastically affect basic and long-established relations...¡® 20 tween carriers.

We respectfully suggest, however, that the Congress, in the meanti se wish to encourage greater coordination of services by enacting legis,at. & set forth in S. 676 and H.R. 2088.

ייד

ESTABLISHMENT OF THROUGH SERVICE AND JOINT RATES; JOINT BOARUS Section 4(a) of H.R. 4701 contains a declaration of policy that, in the interest, the establishment of through service and joint rates, fares and between carriers of all modes should be encouraged and promoted mission strongly favors and recommends enactment of this polies des uti We suggest, however, that as between carriers subject to the jurisd. the Commission, this policy would be implemented expeditiously and efe by enactment of H.R. 2088 and S. 676,

Section 1003 of the Federal Aviation Act of 1958 which section 4-15 bill would amend, authorizes air carriers to establish through service a: rates with other common carriers. Section 1003 further provides that relating to through service and joint rates between air carriers aid carriers subject to the Interstate Commerce Act may be referred by the state Commerce Commission or the Civil Aeronautics Board, either lojma plaint or upon its own initiative, to a joint board composed of a live t members of the Commission and Board, as appointed from time to time di respective chairmen.

Subsection (b) of the proposed revision would, among other tlangs the membership of the joint board under section 1003 to include me i the Federal Maritime Board. As thus composed, the joint board, woun

: roposed subsection (e), be authorized to pass upon such matters relating to zirough service and joint rates as may be referred to it by any of the par2-cipating agencies, upon its own initiative, or upon complaint filed with the 233 an affected shipper, consignee, or carrier. Participating carriers I also be authorized to file complaints respecting the lawfulness of the 2.v.motim of such joint rates,

Is, considering section 4(b) of the bill it should be kept in mind that, with passible exceptions, statutory authority already exists for the establishnt of through routes and joint rates with respect to combination of rail. or and water services subject to the jurisdiction of the Interstate Commerce -dimission; air service subject to the jurisdiction of the Civil Aeronautics ard, and water service subject to regulation by the Federal Maritime Com*. The only through-route and joint-rate combinations apparently not authorized are those which would be applicable (1) to domestic offshore r traffic moving between the U.S. mainland and its insular possessions (eg, gão Rico, Guam, Wake, and the Virgin Islands), and (2) to traffic moving by Thought Ween the United States and foreign countries.

Ite Commission believes that the important changes in the administration and in tons of joint boards contemplated by section 4(b) should be carefully 1d and clarined before receiving favorable consideration by the Congress. his end, and acting in accordance with the request of the President in his portation message to Congress on April 5, 1962, the Chairmen of this Com.--.--n, the Civil Aeronautics Board, and the Federal Martime Commission have -- *, er deavoring to seek a coordinated and mutually satisfactory solution which finitate and improve the operations of interagency joint boards. It is sted that our current active consideration will lead to recommendations 21 matter in the very near future.

1. this circumstance, it is suggested that action on section 4(b) be held in yance until the results of this joint effort are obtained.

ENFORCEMENT AGREEMENTS WITH STATES ON HIGHWAY TRANSPORTATION Under section 205(f) of the act, the Commission, among other things, is au-horized to avail itself of the cooperation, services, records, and facilities of tate authorities in the enforcement or administration of the provisions of part Section 5 of the instant bill would amend section 205(f) so as to specifically authorize the Commission to reciprocate by entering into cooperative agreements with, the States to enforce State and Federal economic and safety laws and regu&ionis concerning highway transportation.

We strongly favor cooperation with State authorities in any manner which may ." prove the effectiveness of compliance and enforcement activities in the vital aren of highway safety. In addition, the Commission believes that enactment ? this proposal will be of substantial assistance in curbing unlawful operations, especially if our recommendation limiting the agricultural commodity exertion te vehicles having three axles or less, as set forth in HR. 5201 and S. 925, is dopted Since section 5 would remove any doubt concerning the general author. of the Commission to net cooperatively with the States in these areas, we

- .pport and recommend enactment of this legislation.

At the same time, we observe that section 5 is silent as to matters which may be - ade the subject of a cooperative enforcement agreement. Consequently, we are it certain of the extent to which the proposed legislation contemplates more, fat.deed it does, than an exchange of information. In this respect, we respect..it sggest that some clarification is desirable,

In addition, it is noted that section 222(d) of the Interstate Commerce Act mud bits the disclosure by any special agent, examiner, or accountant of any formation coming to his knowledge during the course of any examination or • spustion of a motor carrier's property, equipment, or records, except as he may - directed by the Commission or by a court or judge. We are not certain that tion empowers the Commission to grant blanket authority in advance for id = losure by its personnel to State officials of information concerning State tations which has come to their attention during the course of an official evan 'nation or inspection.

In view of our doubts in this respect, we also recommend that section 5 of HR 4701 be amended so as to give the Commission clear authority to allow such slosures under appropriate safeguards in cooperative agreements.

EXTENSION OF CIVIL FORFEITURE PENALTIES OF INTERSTATE COMMERCE ACT TO VIGA TIONS INVOLVING LACK OF OPERATING AUTHORITY, INCREASE IN PENALTIES Section 6 of H.R. 4701 would amend section 222(h) of the Interstate Comme Pre Act so as to extend the civil forfeiture provisions therein to unlawful operat by motor carriers and to violations of the Commission's motor carrier safe! regulations. It would also increase substantially the amount of forfeitures re scribed. Legislation along these lines has been recommended by the Con-t.% € on a number of occasions and testimony in support thereof presented in hearings before committees of the House and Senate. This proposed amendment is coa sistent with legislative recomendation No. 12 in the Commission's 76th Ann Report, which has been implemented by the introduction of H.R. 2004 and 8 ta in the House and Senate, respectively.

Under existing law, procedures for dealing with certain motor carrier v. tions are often slow and cumbersome, and frequently ineffective. Criminal ;7. cutions, for example, must be brought in the district in which the vio,stuurs occur. Thus, in the case of multiple violations by a carrier with extensive time torial operations it may be necessary to institute separate actions in setera district courts if all of the violations are to be covered. Civil forfeiture procvenj ings, on the other hand, may be instituted in the district in which the carrier na.” tains its principal office, where it is authorized to operate, or where it can found. Moreover, less time is needed for investigating violations because of the difference in quantum of proof required in such proceedings.

Under the proposed amendment a civil forfeiture action could be bringh: against a for-hire motor carrier for transporting property without a required certificate or permit. Such action would be available whether or not the carre had taken steps to give the operation an appearance of legality, but the proteze enforcement advantage that would accrue would be when the operator, by men,tas of an alleged vehicle lease or an alleged purchase of the commodity hauled s attempting to give the operation an appearance of private carriage.

There are a number of vehicle arrangements in which the facts demon strat ng their illegality are readily ascertainable. This is also true of unlawful opera tions under the guise of legitimate private carriage such as so-called buyoutė sell operations. However, considerable difficulty is often encountered in estal ing the subjective elements of knowledge and wilfullness required to obtain a criminal conviction. In addition, in a criminal proceeding there can be no at peal from an acquittal. Although under the proposed civil forfeiture prov sc violations, of course, would still have to be established by a preponderance ✔ the evidence, we believe that the proposed amendments would assist materia in our enforcement effort. Actually, such cases are now handled in the civi courts, but an injunction against such operation in the future is the most that can be secured. The possibility of a civil injunction action, where there is 2 pecuniary penalty or criminal stigma involved, has very little effect as a deertvg" to would-be violators. A civil forfeiture action, carrying with it substara. monetary penalties should, on the other hand, have a strong deterrent efer against questionable leasing arrangements.

Enactment of the proposed legislation would also greatly facilitate the (c mission's enforcement activities in the important area of motor carrier safety In view of the threat posed by the unsafe operator to the public safety on highways, there are few areas in which the need for efficient and effective mess of enforcement are more pronounced. Although a very high percentage of involving violations of the Commission's safety regulations are disposed of st pleas of guilty or nolo contendere, investigations looking toward such partner a tions are nevertheless extremely time-consuming because of the neces¡ý ď proving every element of the alleged criminal offense. Effective reguia in the safety of operation of the vast number of carriers subject to our jurishar tion demands that maximum utilization be made of the segment of one force that is devoted to this activity. Since the quantum of proof required 2 a civil forfeiture proceeding is not as great as that required in a criminal act a substantial amount of the time that must now be spent in preparing for er st nal prosecutions in such cases could be devoted to handling a larger au of cases under the recommended forfeiture procedure.

For the foregoing reasons, we strongly support and urge enactment of sective At the same time, and in accordance with an additional recommendative a tained in our legislative recommendation No. 12, we suggest that the ti sion's effort to achieve more effective and expeditious enforcement W greatly enhanced if it were authorized to institute forfeiture proceedi:

tly in the courts instead of proceeding through the Department of Justice as tam now required to do.

Since a civil rather than a criminal proceeding is involved, participation by Te Justice Department would not seem to be essential. This proposed change the statute could be accomplished by substituting the words "by the Com..on or its duly authorized agent," for the words "in the name of the United States," in the second sentence of section 222(h), and by striking the fourth and St.h sentences of the subsection.

CIVIL LIABILITY FOR VIOLATIONS OF FEDERAL AVIATION ACT BY AIR CARRIERS Sections 7 and 8 of H.R. 4701 would amend the Federal Aviation Act so as to take air carriers liable for the payment of damages in reparation awards to ¡ersons injured by them through violation of that act. Since enactment of this portion of the bill would not affect the jurisdiction or functions of the Comssion, we shall not undertake to comment thereon.

We wish to point out, however, that our current legislative recommendation Nos cas implemented by H.R. 2594 and S. 678) seeks to accomplish the same uity with respect to shippers injured through violations of the Interstate Comve Act by motor common carriers and freight forwarders. The President in stratisportation message of April 5, 1962, and again in his supplemental mesge on the occasion of the introduction of the instant bill, has recommended setment of legislation which will accomplish this result. We, of course, trongly concur in his recommendation, and urge enactment of H.R. 2594 or *678

SIMPLIFICATION OF GOVERNMENT TRANSPORTATION RATES AND PROCUREMENT; TRANSPORTATION OF MAIL BY MOTOR COMMON CARRIERS

Section 9(a) (1) of the bill would amend the second proviso in section 321 (a) of the Transportation Act of 1940, which excepts from the competitive bidding "e girements of section 5 of title 41, United States Code, transportation services ; rocured for the Government from any common carrier lawfully operating in the Territory where the services are to be performed. It is our understanding that The Comptroller General has construed this exception as being inapplicable to the Transportation of mail.

inder the proposed revision, the head of any agency, or his designee, would be authorized, without advertising for bids, to negotiate contracts for the procurenent of "transportation, including mail transportation services performed by mon carriers by motor vehicle when the services required can be procured from any common carrier lawfully operating in the territory where such services are to be performed, and services accessorial thereto for the United States" The proposed revision would thus appear to make it clear that mail transportation services may be procured from motor common carriers without the necessity of advertising for bids.

Transportation of mail for the United States by motor vehicle is not subject to regulation by the Commission either with respect to authority to perform such service or as to the compensation to be paid. We are not, therefore, familiar with the problems which may confront the Post Office Department in this area and we take no position with respect to this limited aspect of the proposal However, it also appears from the language employed that contracts for transportation services, other than for the transportation of mail, could be negotiated. without competitive bidding, with any carrier, whether a common carrier or not. It is our understanding that the present exception from competitive bidding apTres only to procuring the services of common carriers, and in this connection it should be noted that sections 1(7) and 22 of part I of the Interstate Commerce Art, and the comparable provisions in part II, III, and IV, which authorize Transportation free or at reduced rates for the Government, apply only to comthon carriers. Since it is not clear whether the extension of this exception to ther than common carriers was intended, we deem it advisable to call this to the committee's attention.

Paragraph (2) of section 9(a) of the bill would, in effect, repeal present subrection (b) of section 321 of the 1940 aet by substituting entirely new provisions, The present subsection relates to rates to be charged by so-called land grant railroads when performing transportation services for the Government. Since landgrant rates, if presently applicable at all, are no longer an important factor in The performance of transportation services for the Government, we see no objec tion to the elimination of the present language.