The proposed new language would authorize the Administrator of Genera! Services and the Secretary of Defense, or their designees, on behalf of the ei. and military agencies, respectively, to negotiate, contract for, or “others establish," for periods not exceeding 1 year but renewable for successive 1 var periods, simplified rate structures for transportation services and accessorial services procured for the United States. As a condition precedent to the estab lishment of any such rate structure, the Administrator and the Secretary won 1 have to determine that the prospective structure was in the "public and Got ernment interest" and might reasonably be expected to produce “lower or to" substantially higher" administrative and transportation costs than are normally applicable to the United States. A further prerequisite would be the conduct of research and experimentation for the purpose of devising practical systers t make rate publication and ascertainment less costly and more convenient. of the purposes appears to be the development of a system that wonid he we suited to condensed tabulation or the application of automatic data proces-ng Finally, the new subsection would require the regulatory bodies to "ol serve recognize, and employ to the maximum beneficial extent the techniques and results of said research and experimentation." Industrial, academic, and other governmental agencies would merely be authorized to do so.

Another purpose of section 9(a) (2) appears to be the development of a rew method of determining transportation charges which would replace the presen" rate structures of the carriers on Government traffic, including seetich charges. A further purpose seems to be the creation of a rate structures arate and apart from the existing commercial tariff system--which would susceptible to automatic data processing procedures. While the use of automate data processing is usually desirable, we do not feel that the maintenance of just and reasonable rates for the carriers should be subordinated to ma kre data processing considerations.

We agree with the overall objectives of the proposal insofar as it seeks I simplification of rate structures, for it would merely incorporate into law the existing right of the Government, or any shipper, to urge such action upon te regulated carriers. There is some danger, however, that the main thrust of this proposal aims at a reduction in administrative and transportation costs te the Government at the expense of a flexible rate structure and, possibly eng at the expense of the carriers since there is no requirement that they resem a corresponding reduction in their costs. We would, therefore, be opposed to the creation of a special rate structure for Government traffic which would be lower than that for commercial traffic unless it can be shown that there we all be a corresponding reduction in the cost of performing the service.

The Commission has for many years been of the view that, except during ti of war or national emergency, the Government should pay full tariff rates charges for transportation services performed on its behalf, the same as p other shipper or user of common-carrier services. A large percentage of the **** transported for the Government now moves at reduced rates under section. which are not available to the commercial shipper. This preferential treste pet has a strong tendency to increase the cost of regulated transportation wa to commercial users who, when their rates become too high, resort to private carriage. Such diversion of traffic to private carriage is obviously deter met 's to the maintenance of a sound common carrier system. Moreover, the rrefen ential treatment accorded the various levels of Government is, in our view consistent with the national transportation policy which has among its of Somer com "to foster sound economic conditions in transportation" and "to encommize the establishment and maintenance of reasonable charges for transportation, we ies without unjust discriminations, undue preferences or advantages, or ni or destructive competitive practices,"

Accordingly, rather than broaden the authority of the Government to ser transportation services at less than existing commercial rates, as prop section 9(a) (2), we favor complete elimination of such authority exer zë qe time of war or national emergency. Enactment of legislation to the was recommended to the Congress in the Commission's annual reports for 10% and 1956, and more recently in a report to the Senate Commerce Committee detal December 12, 1961, commenting on 8. 1145, “To amend section 22 of the Interstate Commerce Act."

In addition to the contemplated creation of a special rate structure fie ernment traffic, there are a number of other features of section 9(a)+2) in our opinion, are open to serious question. These were pointed ont with ma ticularity by former Chairman Murphy in testimony before your committee a€

(See pp. 139 140, printed report of hearings on H.R. 11583 and HR. 4) We adhere to, but in the interest of brevity will not repeat here, the set forth in his testimony on these vital points.

For the foregoing reasons, we again recommend against enactment of section a = 2y of the bill.

Station (b) of section 9 would retain the status quo insofar as the provisantis of section 2631 of title 10 of the United States Code are concerned. That ~~tion relates to charges made by vessels of the United States for transporting pipes purchased for the armed services. Since these provisions are not adminfered by the Commission, we do not feel that we are in a position to offer any .--.;-fil comments as to the merits of this subsection.

TRANSFER OF POWERS VESTED IN INTERSTATE COMMERCE COMMISSION WITH RESPECT TO GUARANTY OF LOANS TO COMMON CARRIERS BY RAILROAD

xas ti -12 10, 11, and 12 of the proposed measure would accomplish a transfer f the Commission's railroad loan guaranty functions under part V of the act to tle | department of Cominerce.

We recognize that there are cogent reasons both for and against the effectnaon of this proposed transfer. We emphasize, however, that the Commission, is reason of its role as an independent regulatory agency, requires and contin"1סv receives detailed operating and economic data from the railroads and, Theme by, is in a peculiarly advantageous position to evaluate efficiently and ex...ously, and at minimum cost, the current financial condition and needs f individual railroads. We feel that our administration of part V has been ..ent and in the public interest.

In these circumstances, we believe that the question as to whether part V «onid be repealed and our functions thereunder transferred to the Department .f Commerce, or other executive agency, is a matter which should be reserved for determination by the Congress on the basis of broad policy considerations, T.. of course, assumes that the present statutory expiration date of part V is to I extended beyond June 30, 1963.

We suggest that if sections 10, 11, and 12 are favorably considered, certain mod1o, ations are necessary in order to eliminate ambiguities and voids appearing in stihsactions (f), (g) (1) and (3) of section 10 as presently worded. For convenience, these suggested modifications are set forth in an appendix attached hereto.

Fnally, and with reference to the bill as a whole, we observe that in the abBote of a specified expiration date, its provisions would take effect on the date f enactment. This, we feel, would create a number of problems. For example, section 3 is enacted, it is possible that some of the tariffs of the affected carrers which are in effect on the date of enactment would not be in full complia with the provisions of the section. These carriers would need at least 45 60 days within which to bring their tariffs in line with the new requirements Fur ??ermore, with respect to section 4. if enacted, sufficient time, not less than 180 days, should be allowed to establish any necessary regulations such as the form and ti atter of publishing and filing tariff's pursuant thereto. Finally, in connee

with section 12(a) concerning the transfer to the Department of certain ani ri ission personnel and property, the Bureau of the Budget would need some tie within which to determine which employees and what property should be transferred We recommend, therefore, if these provisions are favorably con 5-gee, that the bill be amended so as to provide that the aforementioned seeự « shall not become effective until the expiration of 180 days after enact

Except as otherwise noted, we recommend enactment of HR. 4701 We trust that you will find the views expressed in this letter helpful in your stly and analysis of our transportation system.

Sincerely yours,

LAURENCE K. WAIRATH, Chairman

APPENDIX. SUGGESTED MODIFICATION OF SECTION 10 OF HR 4701 meetion 505 of the Interstate Commerce Act provides, in effect, that the Commasjon may consent to the modification of the provisions of any guaranty into t it had entered if it determines that it would be equitable to do so *** (f) of section 10 of the bill would grant similar authority to the Sce rary of Commerce with respect to any guaranty into which he had entered Noh authority would be granted to the Secretary, however, with respect

20-516--63-pt. 2-12

Sub

NOTE.- Percentages computed before rounding. Individual items may not add to totals because of rounding

5:1

F1, road, and petroleum residual os, not other a ise spec

Cottonseed oil.

1.seed oil

bean oil

Vegetable and nut oils, not otherwise spe-ife-l

O not otherw:

()

itik Pottoms

TABLE 5.-Estimates of the amount of regulated-carrier revenue received traffic that would have been exempt under provisions of S. 1061 H.R. 479 commodity class and type of carrier, under the agricultural and bulk commode ties exemptions, Groups I-V, calendar year 1961

NOTE--Percentages computed before rounding. Individual items may not add to totais becaar i

rounding.

TABLE 6.-Estimates of the amount of regulated-carrier revenue received from traffic that would have been exempt under provisions of 8. 1061; H R GEN commodity class and type of carrier, under the agricultural commodity esemp tions, Groups I-V, calendar year 1961