STATEMENT OF W. G. BLEWETT

My name is W. G. Blewett. I am a vice president of Peabody Coal Co general offices in St. Louis, Mo. I am also vice president of the National War ways Conference, an organization made up of shippers, carriers, and others 3 the United States interested in a national program to determine the valges the waterways as they relate to the economy. I am authorized to speak for coal segment of the conference.

We concur in full with the statements made to this committee by F. A. Mech g vice president, A. L. Mechling Barge Lines, Inc., and David A. Wright et. man, Waterways Bulk Transportation Council, Inc. But in addition the " we would like to address ourselves to the proposed legislation as it affes to the coal industry.

We are opposed to H.R. 4700 because it fails to provide adequate protest e for that part of the water carrier industry upon which we depend, namest bulk contract carriers.

The records of the U.S. Army Corps of Engineers show a total coal tors in the year 1961 of 85,883,908. We believe that if the total figures were of able, it would be a little more than that-somewhere in the area of 100 m tons. Unfortunately, total actual recording is not available.

We are sure that, with very few exceptions, most of this coal would fmove at all if the rules of the games were changed. We say this becauseof it is from coal producing fields which the railroads all but abandoned a years ago on the grounds that the coal in these fields was of a value as to rze them out of a place in the economic picture. We asked the railroads to make a study of these fields and to give us rates and equipment which would per to move the coal in volume, and we were turned down because of the reases, have mentioned.

In sharp contrast to this, there are coal mining operations in these today which are literally showpieces for the mining industry In fact :are coming from all parts of the world to see and inspect them because are producing in a very modern manner some of the lowest cost thermal ene in the entire world. They are simply tremendous in size and scope.

The creation and success of these operations is simply due to available wate carriage, which seemingly has no limitations with the result that we are to see even larger and more modern operations in these fields in the very peg future producing energy at still lower costs.

Hundreds of millions of dollars have been spent by this segment of the industry in developing these operations and it is just the beginning Other D dustries have had similar experiences and expansion through water orig resulting in billions of dollars being spent in the last few years along the i waterway system, and apparently it is their hope for even more I?M?Witness, for example, some of the tremendous electric generating stations wa are so located and also their plans for the future.

So we look at H.R. 4700 and try to understand what it means If the ponents of this legislation can show the Congress that the privileges being s are good for the economy, that we are going to get lower transportation is based on uniform rates throughout the coal industry and not just because water compelling factors here and there, and further that these rates w be withdrawn as the water carriers are forced out of business, all so we' good. But without this showing there are good grounds for the fears expre by some that such liberties would only be used for the purpose of driv.rg water carrier out of business. This, of course, would not be difficult whe considers the financial structure of many of the water carriers. In su event we have reason to believe that we shall be in exactly the same pwe were in prior to the enactment of the Interstate Commerce Act.

We believe the Congress should take a good hard look at these proping-s other similar proposals to determine the real effect on the economy of the an try. In our opinion it could be a very serions setback and certainly this 2time for very questionable experiments. We do know that throu, banue country we have had an economic growth measured by the billions of dou by taking advantage of the publicly owned waterways of the United States would like to be very sure that anything considered should not in any way this growth.

Thank you.

STATEMENT OF C. A. BUCHANAN, EXECUTIVE SECRETARY, NATIONAL AGRICULTURAL TRANSPORTATION LEAGUE

My name is C. A. Buchanan. I am executive secretary of National Agrienltural Transportation League. This is a nonprofit organization which is operated primarily for the benefit of the exempt trucker; that is, the long distance trucker of fresh fruits and vegetables,

We have over 3,000 members representing over 9,000 trucks,

The railroads have requested deregulation as to ratemaking on agricultural products and I hope to show you that such a request, if granted, would be bad bad for the railroads and bad for the presently exempt trucker and would, in fact, take us back into the last century when there were no effective ratemaking procedures. I do not consider it wise, just, or proper, to take us back into the last century for modern transportation procedure and methods.

When I say that this request for rate deregulation would be bad for the railreads i ask you to consider those items on which the railroads are already losing money on their freight hauis. It would appear that they had already gone far enough on some items in reducing rates.

The Interstate Commerce Commission, Bureau of Accounts, has prepared a report, "Distribution of the Rail Revenue Contribution by Commodity Groups 10," which contains a table 5: "Leading Commodities in Failure To Contribute to the Transportation Burden by Territorial Movements." This table was prepired by them to answer the question as to what commodities have demonstrated failure to pay amounts equal to their direct costs. The first five lines in this table include pulpwood, gravel and sand, feed, lettuce, and potatoes, and these show a deficit contribution as follows:

Year:

190

1979

1958

Total deficit contribution $90 013, 000 80, 621, 000 81, 285, 000

Each of these five items named have remained in this same category for each the 3 years scheduled.

I his entire table has 50 lines for different movements of commodities and of this total of 50 lines, 26, or over 50 percent are listed as fruits, vegetables, or other types of agricultural products including feed and livestock.

With a report of this nature to review, it would certainly appear unnecessary to give further rate-cutting authority to the railroads since the only foreseeabie result would be to make a bad situation much worse not only for the railroads but also for the agricultural truckers and the farmers themselves through an unstable rate structure on transportation.

Just to use some examples these items are reported as needing rate increases per ton to "cause revenue to equal direct costs":

The foregoing line reference is used in the table with five lines each being used for each of the “los lenders" by terrritorial movement

This report states that all deficit traffic resulted in an annual loss (against out-of pocket cost) of approximately $243 million.

This same table has a reference to "indicate the percentages that the averig rates, by commodity classes, would need to be increased in order to defray on d pocket costs. This is the break-even point at which the carrier goes from bei better off without the traffic to being better off with it";

Of these 12 items listed as examples, in 10 cases the percentage exceeded 3 percent below the break-even point.

This leads to the simple question-Why permit deregulation which would al to greater losses?

With your permission, I would like to review a little transportation hie Prior to the formation of the Interstate Commerce Commission much ta existed with the railroads, chaos as to rates, chaos as to secret rebates aud à 4 backs-in general, things were most chaotic and the largest and most azziemoja shipper could come up with the lowest rate and perhaps with the largest reis'e This procedure was the normal business practice of the day and large fortse were made because of this unfortunate condition in transportation. After the ICC was formed these unfavorable practices as to rates and other matters ta ol into the background.

While on the subject of railroads the president of a railroad hauling a la volume of potatoes criticized the exempt trucker for rocking prices in the pa market. I wrote to him giving him certain facts and information. He reg ni stating that the instability of rates quoted was very destructive on the ec transportation system. He further wrote: "I had not realized before reveng your correspondence that the very ills I have deplored with respect to this form of transportation are working to the detriment of the trucker of these e modities himself."

He further stated that he can readily see how dealers, by judicious barga d can make the rate paid for the transportation of these commodities ex**** unprofitable at times to the trucker. He closed by suggesting that we fun w the railroad in an effort to have a Federal tariff set up on the trucking of exenx commodities.

Let us look just a moment at the presently regulated motor carriers T plight was most desperate until the year 1935, when Federal regulation plan them under the Interstate Commerce Commission.

In aviation, rates were a chaotic mess until in 1937 the Civil Aerona an Authority set up a rate procedure.

In passenger traffic, whether by bus, train, or plane, the tariffs clearly forth the rates. You and I as individuals would be regarded as some kind o nut if we held up the ticket line to argue about the ticket price.

In regulated freight traffic, whether by motor carrier, plane, or tran would also be regarded as some kind of nut if we tried to chisel on the rate the tariff.

In the US mail, you and I place a 5-cent stamp on a 1-ounce envelope to a regular letter Would we not be regarded as queer if you or I argued w the postmaster that we wanted a lower rate?

In the exempt trucking field a 17-ton load of produce can be subject to ser vidual negotiation as to rate on each load. Isn't this a ridiculous situati Now enough of comparison with other forms of interstate transportation It is a complete mystery to us as to how farmers and produce shipper maintain stable markets when one man is charged one rate and his ne

an and often does pay a higher or lower rate for traffe to the same point. I'eople who profit from this situation can be the middlemen who may be able to pocket money which logically should go to the trucker.

Exempt truckers are not recognized by the Interstate Commerce Commission In any of their rate proceedings since the exempt trucker is not now required to file a tariff and does not come under their regulations. In our opinion it would be proper to set up a procedure whereby agricultural products in long-distance trucking would be subject to rate regulation without the need of operating authority.

This has been recognized by the Watermelon Growers & Distributors Associa tion at their annual meeting in Jacksonville, Fla., in March 1963, when the following resolution was adopted:

“Whereas legislation is being proposed in the US. Congress to deregulate the railroads so as to eliminate the requirement of filing of tariffs as to agricultural and bulk commodities;

"Whereas such deregulation could be harmful to watermelon growers and distributors in that such deregulation could be used to eliminate or substantially reduce truck traffic through destructive rate practices: Be it hereby

"Resolved, That the Watermelon Growers & Distributors Association vigorously opposes such deregulation of the railroads; and be it also

"Resolved. That other agricultural interests be encouraged to oppose this proposed deregulation of the railroads; and be it further

"Resolved, That the following plan is recommended as a compromise proposal to provide rate regulations without the need of operating authority on the presently exempt agricultural commodities.

“Recommendation No. 1. No operating authority be required for trucks thus providing complete flexibility for anyone wishing to engage in this field of truck transportation

“Recommendation No. 2. The filing of rates on these products for trucks with the Interstate Commerce Commission be required to conform with existing re

quirements.

“Recommendation No. 3. Presently exempt trucks be required to comply with Insurance of public liability insurance as well as for property damage and cargo as now required by ICC for other regulated trucks.

**Recommendation No. 4. Present compliance by trucks with the requirements of the ICC safety regulations be continued "

We ask your consideration of this proposal.

The field of exempt trucking is one of a very few frontiers left in these United States where an individual businessman may endeavor independently to make a living for himself and substantial ents in rates by railroads or by regulated motor carriers should not be permitted to further limit an already limited field for the independent trucker as an independent businessman

Senator Warren G. Magnuson, chairman of the Senate Interstate and Foreign Commerce Committee, in addressing the 36th Annual Convention of the Washington Motor Transport Association stated his belief that his committee would make crystal clear that no form of transportation can lower rates at will to force other forms out of the competitive picture

National Agricultural Transportation. League wrote Senator Magnuson, after this address, stating our interest in his remarks

“Your comments in Yakima, Wash, Senator Magnuson, are of special Interest to us. In your address you advised that your committee will make it crystal clear that no form of transportation can lower rates at will to force other forms out of the competitive picture.""

That is exactly what is being done in the exempt trucking field at the present time The exempt trucker can charge any rates he wishes The regulated motor carrier can charge whatever he wishes on exempt trucking and the railronds have entered the picture with drastic rate cuts on transportation of exempt commod:ties It is a situation where anyone can ent the rates below the rates of anyone else and apparently nothing can be done about it

While I am sympathetic to the problems of the railroads, I am not sympathetic to substantial reductions in their rates when rates are reduced on items which they are already hauling at a loss,

All I can say, gentlemen is that I agree wholeheartedly with Senator Magnuson that no form of transportation should be able to “lower rates at will to force other forms out of the competitive picture," and I sincerely hope that these hearings will support these same views and not grant the privilege of reductions in

rates by the railroads which have been proposed and which would, in try : opinion, have disastrous results to the railroads, to the long-distance trucant fresh fruits and vegetables and to the growers and shippers.

In closing, let me emphasize that our opposition to this legislation is not he on any effort to have an advantage. The present exemption is no advanma We don't "enjoy" it. We don't want it.

We ask you to bring our rates under regulation just like the railroads. regulated motor carriers.

STATEMENT OF WALTER K. Cabot for the Chamber of Commerce

UNITED STATES

My name is Walter K. Cabot. I appear on behalf of the Chamber of Corr * * * * of the United States. I am a member of the chamber's transportation ază munication committee and chairman of its subcommittee on transport po My business connection is that of general traffic manager, Johnson & JULLNew Brunswick, N.J.

In general, the national chamber supports changes that would be ns. H.R. 4700 and 4701 in the Interstate Commerce Act. I shall, however, res mend that certain provisions of both bills be modified to some extent

First, in the way of introduction and in order to indicate the careful ***** given this proposed legislation by the chamber, I should like to describe t the composition of the transportation and communication committee and study it has given these proposals. This committee initiated the chim position on these two bills. It is a 62-man committeee, composed of a ta representation from all modes of transportation and communication, and .... financial interests, educators, publishers, and industrial traffic manage “A other users. It has studied the President's proposals ever since they were ated in his transportation message of April 5, 1962. The committee has s the principal testimony taken last year and it has discussed the propos some length. With all viewpoints represented on the committee. I have ri tancy in saying that all arguments pro and con were fully aired. Thes sions reached in a number of instances, of course, were not unanimou« », majority was substantial.

H.R. 4700--EXEMPTIONS FROM MINIMUM RATE CONTROL

I should like to discuss first H.R. 4700, which would exempt all carrie ject to regulation by the Interstate Commerce Commission from minit regulation in the carriage of bulk commodities; livestock, agricultur........ fishery products; and passengers. Air carriers, subject to regulation uneFederal Aviation Act, also would be given the same treatment as far as t.. riage of bulk commodities and livestock, agricultural, and fishery pr are concerned, but exemption as to passenger fares would be deferred

In the explanation accompanying the draft legislation, it is said that pensate for these exemptions, section 5a and similar sections of the i Commerce Act (and applicable sections of the Shipping Act of 1916 ** Federal Aviation Act) would be amended to make the carriers stiligen? antitrust laws as defined in section 1 of the Clayton Act, except with rese agreements applicable solely to through routes.

The national chamber supports H.R. 4700, with certain reservations th. : be summarized as follows:

(1) We approve of the new language inserted in the bill this year : it clear that authority of the Interstate Commerce Commission ote criminatory and preferential rates is retained. It also should be my se that provisions of section 6 of the act, which requires the filing »g are retained.

(2) Predatory rates and monopolization should be prohibited. 1. reference to the antitrust laws in the bill is too vague.

(3) Carriers and shippers should be permitted to continue to dis rate changes through the facilities of rate bureans of confertes only rates for through routes; and consequently section õa, and other sections of the Interstate Commerce Act and the Shipping Act should be preserved.

(4) Because the competitive problem in air transportation, bors extent and nature, is quite different than in surface transportation, an ence to air transportation should be eliminated from the bill.