There is secrecy in their contracts.

Their operating rights are misdescribed and misinterpreted and this is either made possible or is aggravated by the secrecy mentioned just above.

The rules governing and describing the service to be performed by these contract carriers are in practically all instances identical with the common carrier rules.

There is no specialized service that these carriers render. They transport great numbers of commodities, approximating general commodity traffic of the common carrier.

This traffic is carried for a large number of shippers. Primarily the service is rendered to large shippers and at agreed rates. Agreed rates constitute a preference and discrimination long condemned in this country and one which was important in bringing about passage of the original act in 1887.

Rates are frequently lower, though not always, than the common carrier rates.

The service is point to point, that is frequently between large cities. Traffic is hauled in truckload quantities.

As stated, no single factor among those enumerated accounts for the competitive impact that this so-called contract carrier service makes upon common carriers. But a combination of these factors conspires to make regulation unfair under the present law. It is another case of half free and half slave. The carriers that I represent as shown in my prepared statement are relatively small, the majority being small businesses making profits of less than $10,000 a year. They provide a service to town and hamlet as well as to the metropolis, and to the individual businessman as well as to the great corporation. They and these pseudo contract carriers are performing the same service but under different ground rules.

The gross inequities in regulation that permit common carrier service to masquerade as contract carriage should cease. This bill will correct the situation and will hurt no legitimate contract carrier in doing so. In fact, it will be to his advantage. Besides this, it will aid the shipping public and the entire regulated transportation system.

Thank you, sir.

Senator PURTELL. Thank you, Mr. Lawson. Are there any questions, Senator Yarborough?

Senator YARBOROUGH. No questions at this time.

Senator PURTELL. Counsel?

Mr. BARTON. No questions.

Senator PURTELL. Thank you for appearing here. Your full statement will become an exhibit.

(Mr. Lawson's full statement precedes his personal remarks.) Senator LUCAS. I desire to thank you as well as the other members of the committee and the staff for the courtesy extended to our witnesses here today.

Senator PURTELL. That is what we are here for, Senator.

Senator LUCAS. Well, I thought so, but I wanted to make it clear. Senator PURTELL. Thank you very much for your kind remarks. The next witness will be one of those gentlemen who stated that he had to leave town or would like to leave town if he could, and that is

Mr. Frazor T. Edmonson, chairman of the legislative committee of the Private Truck Council of America; is that correct?

Following is some correspondence subsequently received by the committee from: J. S. Law, of Columbus, Ohio; H. C. Sanford, South Bend, Ind.; C. A. Browne, Fort Wayne, Ind.; W. T. Slater, St. Louis, Mo. relative to this subject.

Mr. ROBERT MCBRIDE,

M. C. SLATER, INC.,

St. Louis, Mo., April 27, 1957.

Executive Director, Common Carriers Conference, American Trucking Associations, Washington, D. C. DEAR MR. MCBRIDE: We are interested in Senate bill S. 1384, and I want to make some statements about it for you to give to Congress.

We operate between points in the Chicago, Ill., commercial zone on the one hand, and points in the St. Louis, Mo. commercial zone on the other hand. We transport general commodities including iron and steel articles. We recently lost 2 steady movements of iron and steel articles which averaged over 3,500,000 pounds per year. This traffic was lost to a contract carrier called Contract Steel, Inc. This contract carrier is using the same style of equipment we used to transport the traffic, and gives the shipper the same services we gave. It appears to me that that type of operation does not meet the test of a contract carrier; however, I am told the present law does not state a specific requirement to interpret whether a carrier is actually operating as a contract carrier. Furthermore, it is my understanding that S. 1384 will correct that situation and set up a rule which will make it possible for the Interstate Commerce Commission to determine if a carrier is actually a contract carrier and put a stop to the present practices of these carriers.

I hope this bill will be passed at once.
Your truly,

Mr. ROBERT MCBRIDE,

WILLIAM T. SLATER, General Manager.

SECURITY CARTAGE CO., INC., Fort Wayne 7 Ind., April 30, 1957.

Executive Director, Common Carrier Conference, American Trucking Associations, Inc., Washington, D. C. DEAR BOB: I have been reading in the Common Carrier News Letter for years about the encroachment of contract carriers on our common-carrier business. Our company operating in the Central States area is intensely interested in this matter and the legislation now coming up before the Senate subcommittee. Because I see this competitive situation every day in my work, I would like to ask you to submit the views of our company when the hearings begin on S. 1384, the ICC's proposal on contract carriers. Surely the views of a common carrier should give some weight in Washington.

Here is my statement to be made as forcefully as possible:

I am vice president in charge of traffic for the Security Cartage Co., Inc., a motor common carrier with principal offices in Fort Wayne, Ind. We support S. 1384, and believe its enactment is necessary to eliminate an obnoxious competitive situation now existing between the common and contract carriers. My company has lost truckload traffic to a contract carrier competitor, the Warsaw Trucking Co.; that traffic is castings and paper and formerly moved via commoncarrier service in the same kind of equipment that the contract carrier is using. No special services are performed by the contract carrier as none are required. the only difference is my company is a common carrier and governed by one standard of regulations and the contract carrier by another standard. We do not know what rate we must meet until we have lost the business. If a carrier, to be classified as a contract carrier, must give a special service not offered or performed by a common carrier, it would eliminate situation which I have just described, and create equality of treatment for all carriers.

Yours very truly,

CHAS. A. BROWNE,
Vice President, Traffic.

Mr. ROBERT MCBRIDE,

CLEMANS TRUCK LINE, South Bend, Ind., April 30, 1957.

Executive Director, Common Carrier Conference,

Washington, D. C.

DEAR BOB: I am very much interested in S. 1384 on which hearings are to be held next week before a Senate subcommittee. Certainly this bill is desirable and will, if passed, go far toward correcting present inadequacy in the law. Unfortunately, I cannot be present and I am, therefore, asking that you submit my views to the subcommittee in the following language:

I am vice president and general manager of the Clemans Truck Line, Inc., which is a certificated motor common carrier of property in Interstate Commerce operating between points in Indiana, Michigan, and the Louisville, Ky., commercial zone. Our principal office is located in South Bend, Ind., and we have terminals in Elkhart, Ind., Kokomo, La Porte, Logansport, and South Bend, Ind., Battle Creek, Grand Rapids, and Kalamazoo, Mich., and Louisville, Ky. We own and operate 62 trucks, 135 tractors, and 170 trailers and employ 475 full-time employees. Our company renders a full common-carrier service transporting the small less truckload shipments as well as the truckload shipments. Competition from the so-called contract carriers for the truckload traffic rep resents an ever-increasing problem to my company. We have lost traffic from several different shippers who have diverted their truckload traffic to carriers who are termed contract carriers. We have lost substantial movements of iron and steel articles, soap and toilet preparations, meats and packinghouse products, and washing machines and dryers to Contract Carriers, Inc., Emery Transportation Co., Jackson Trucking Co., and Fruit Belt Motor Service, Inc. I have made a personal investigation of the type of equipment used and the services rendered by the above-named contract carriers in the transportation of the above-mentioned traffic and know that the type of equipment they are using is the same type used by our company and the services they are rendering art no different than the services we performed when the shipments moved via common carrier. There are absolutely no services being offered or rendered by these contract carriers in the transportation of the above mentioned traffic which we did not render. I maintain the services being rendered by these socalled contract carriers are common-carrier services and not a specialized contract-carrier service.

The loss of truckload traffic, which is the only type of shipments these so-called contract carriers transport, has an adverse effect upon our overall operations causing an unbalanced operation and a change in our distribution of the smaller less truckload shipments which are top loaded in many instances on to our truckload traffic. Further loss of truckload traffic could result in curtailment of our services to the small shippers which would not be in the public interest. I have directed these matters to the attention of the Interstate Commerce Commission. However, due to the inadequacy of the present law the Commission's hands are tied.

We do not object to competition. We do object when our competition is not subject to the same regulations that govern common carriers. We support Senate bill S. 1384 and believe its enactment will aid the for-hire transportation industry and be in the public interest.

DEAR SIR: I cannot get to Washington to testify on Senate bill S. 1384, which I understand will be heard next Monday. I believe something must be done to get this contract-carrier situation cleaned up, and am sending you my statement; please put it in the record.

I am commerce agent, and assistant traffic manager, for the Columbus & Chicago Motor Freight, Inc. We are a common carrier of general commodities, and have authority to operate as a common carrier from Interstate Commerce

Commission. We operate between points in northern Illinois and the Chicago commercial zone, and points in the State of Ohio. We have terminals in Chicago, Ill., and in Columbus, Ohio, Dayton, Ohio, and Springfield, and Lima, Ohio.

We have lost a great deal of truckload traffic to Aller & Sharp Co., who is a contract carrier, this traffic we have lost amounts to about 750,000 pounds per year, and is all truckload traffic. Aller & Sharp does not give the shippers any different service than we give them and neither do they use any different equipment, no specialized services are required on the traffic. I have made inquiries from time to time, trying to find out how that carrier can be called a contract carrier, when he operates the same as we do in the handling of truckload shipments, all I ever could develop is that he has a permit from the ICC to operate as a contract carrier. I always thought a contract carrier had to do something different than a common carrier, but have been told that is not the case under present law.

we will ge grateful if this bill will change that situation and show just what a contract carried is supposed to be, it will be a good thing for everybody. My company supports the bill.

We are, respectfully yours,

J. S. LAW, Assistant Traffic Manager.

Mr. EDMONDSON. May I ask permission to have Mr. William Quinlan, our general counsel, of Washington, sit with me? Senator PURTELL. You may. Will you come forward? Will you give your name and your association?

STATEMENT OF FRAZOR T. EDMONDSON, REPRESENTING PRIVATE TRUCK COUNCIL OF AMERICA, INC.

Mr. EDMONDSON. My name is Frazor Edmondson. I am from Dallas, Tex.

Senator PURTELL. Is it your intention to have counsel address the committee, also?

Mr. EDMONDSON. No, except in the case of questions. He is familiar with this situation, and I thought he might be helpful on questions. Senator PURTELL. Very well.

Mr. EDMONDSON. I am vice president and counsel of Campbell Taggart Associated Bakeries, Inc., and appear before you today as a representative of the Private Truck Council of America, Inc., an organization composed of members from many different industries, all of which operate trucks and other motor vehicles as an incident to the conduct of their regular businesses. As the name indicates, none of our members is in the transportation business as such.

They are all private truck operators, transporting goods to their own customers or to their own plants in vehicles owned or leased by themselves. In short, they are "private carriers of property by motor vehicle" as that term is set forth and defined in section 203 (a) (17) of part II of the Interstate Commerce Act and as it has now been judicially interpreted in the Schenley-Lenoir & Brooks Transportation cases (93 Fed. Supp. 517, affirmed by the Supreme Court of the United States February 26, 1951, 340 U. S. 925).

Knowing that the committee is well informed on the legislative history of the particular section of the act just referred to and the litigation which followed, no detailed account of those phases of the subject matter will be attempted in this statement.

I was going to ask leave here, Mr. Chairman, to insert further matter but I believe that permission was given in blanket form at the beginning of the hearing.

Senator PURTELL. No; it wasn't given in blanket form. We can't because we don't know how voluminous the additional information might be. Might you inform the chairman as to how voluminous the additional material is.

Mr. EDMONDSON. Not more than 10 or a dozen pages.

Senator PURTELL. And it is germane to this whole subject?

Mr. EDMONDSON. It is germane. It is the background of the litigation, something of a brief.

Senator PURTELL. Without objection, it will become part of the record. Do you want it put in at this point?

Mr. EDMONDSON. I will furnish it subsequently and would like to have it inserted at this point.

Senator PURTELL. That will be done.

(The information referred to follows:)

PRIVATE TRUCK COUNCIL OF AMERICA, INC.,

Washington, D. C., May 17, 1957.

Senator GEORGE A. SMATHERS,

Chairman, Surface Transportation Subcommittee,

Senate Interstate and Foreign Commerce Committee,
Washington, D. C.

(Attention of Mr. Frank Barton)

DEAR MR. CHAIRMAN: During the testimony of Mr. Frazor T. Edmondson, Dallas, Tex., on behalf of the Private Truck Council of America, Inc., on May 7, permission was granted for him to file a supplemental statement, to be inserted at a designated place in his statement and thus to become part of the record. Enclosed for your information is the supplementary statement of the Private Truck Council of America, Inc., concerning background of S. 1677 and S. 1384. Do not hesitate to call upon us whenever we can be of any assistance in any

way.

Respectfully submitted.

JAMES D. MANN, Managing Director.

SUPPLEMENTARY STATEMENT OF PRIVATE TRUCK COUNCIL OF AMERICA, INC., CONCERNING BACKGROUND OF S. 1677 AND S. 1384

The current proposals to amend or modify, directly or indirectly, the provisions of the Interstate Commerce Act having a bearing upon the distinction between for-hire and private truck operation are the latest moves in the long and continuing history of efforts of for-hire carrier interests to restrict or interfere with operation of trucks by and in the course of enterprises other than that of for-hire transportation.

These proposals can be adequately evaluated only in the light of that history, some highlights of which are given in this supplementary statement.

In view of their unsuccessful litigation to secure advantageous interpretation of the present act, the tactics of such interests at the moment appear to call for encouraging a reopening of the act by some change-any change at all-that would open the door to still further proposed amendments, or new legislative history, or at least make possible further litigation to reduce in great or small degree the lawful scope of private operation.

"COMMODITIES CLAUSE"

The legal attacks upon private truck operation have included from time to time even suggestions that a "commodities clause," such as that in part I of the act, regulating railroads, be applied to trucks, so as to make it unlawful for a person to transport by motor vehicle any article produced by him or which he owns in whole or in part or in which he has any direct or indirect interest, and therefore wholly prohibit any operation of trucks other than by common and contract carriers.

EMERGENCY CONTROLS

During World War II businessmen were confronted with persistent and some times successful efforts by those antagonistic to private motortruck operation to subject such operation to far-fetched and unreasonably restrictive regulations.