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Traffic League of which we are a member. These objections will not be repeated in detail. Hence this statement goes to the general aspects of the problem. We should note here that the National Industrial Traffic League with its comprehensive membership is the only organization which appeared before your committee and which was competent to speak generally for the shippers which here in reality are the public.

With the effective regulation of railroads by the Interstate Commerce Commission beginning in 1906, the era of carrier efforts to adjust their service to their customers' needs came to an end. Rigid operating rules, rigidly enforced, imposed on the public the necessity to tailor its needs and its operations to fit those of the carriers and much of the benefits of the free enterprise system was lost.

As the years passed, railroad operation became increasingly rigid, hence when the motortruck became an efficient transport vehicle, its use was avidly seized upon by the public. When part II of the act regulating motor carriers was adopted in 1935, it was largely the product of common carrier advocates, namely, the railroads and those motor carriers who desired regulation to reduce competition. The public, however, did not wish to lose the flexibility of truck operation, hence the provisions for contract carriers.

In the statement submitted to your committee on July 3 by Commissioner Clarke, Chairman of the Interstate Commerce Commission, I find it difficult to escape the conclusion that it is not actually the difficulty in drawing the line between contract and common carriers which is objectionable to the Commission, but rather it is due to the Commission's inability to draw the line where it and the common carriers think it should be drawn. Obviously contract carrier service is popular with the shipper. In our opinion it should not be impaired because it takes business from the common carrier.

Chairman Clarke at page 8 of his statement deplores the diversion of freight from common carriers because of the resulting injury to the public, "particularly to the smaller shippers who depend entirely upon common carrier transportation." From our observation it has appeared that congressional committees have been impressed with the advancement of regulation in behalf of the small shippers. This is indeed a most proper consideration for congressional committees when the advocacy is actually in behalf of this part of the public. Because this part of the public is of such concern to Congress, it becomes important to examine such proposals to determine if indeed they are made in behalf of this part of the public. Who, it may be asked, is the small shipper? Is it he who makes small shipments? This category embraces some of our largest corporations who make and receive many thousands of small shipments annually. Is it then the small business which makes the small shipments? If it is a small machineshop making unfinished parts of an article, the chances are the machineshop has a contract with a large producer. If a small manufacturing plant is producing finished articles for sale to the retail trade, he reaches this trade either through large chainstores or through wholesalers who supply the small retail trade. In any event the burden of securing adequate service from the carrier falls upon the shoulders of the large corporations who are equipped to perform. The problem of the small shipper injured by rebates granted to his larger competitor when the Interstate Commerce Act was formulated, no longer exists.

Chairman Clarke tells us on page 9 that contract carriers may pick and choose their customers "and may discriminate in their charges." It would probably be a safe wager to make that there is not on file with the Commission even one complaint of discrimination created by contract carriers. Certainly such discrimination has never been voiced in a manner to command public attention. If such discrimination created complaints among shippers, the expansion of contract carrier service would indeed tend to ameliorate the discrimination; however, it is the expansion of contract carrier service which here apparently is the primary feature to which the Commission is opposed.

Another phase of this situation which, we respectfully submit, should be weighed by your committee is the support accorded this bill by contract carriers. The provision that the Commission will declare contract carriers to be common carriers if their operations do not comply with the provisions of the bill is a morsel too tempting for this group of carriers to resist. It will clearly remove all opposition by the Commission and harassment by common carrier competitors. in the pursuit for more business. This, however, we submit, is insufficient support for the proposals; the public interest here is paramount. Obviously an efficient flexible contract carrier service should be supplanted by more costly and rigid common carrier service only upon a most convincing showing. The assent of the contract carriers here involved is clearly no such showing.

We, therefore, respectfully urge upon you that any change in the act in the respect contemplated by H. R. 8825 should only be made upon a strong public demand for it; that the primary advocacy comes from groups with a special interest, namely, the carriers, as opposed to the public interest and, finally, that the advocacy by the Interstate Commerce Commission is directed to the philosophy that the common carriers need the protection advocated. The benefits to flow to the public from these changes designed to benefit common carriers are couched in the most general terms without specific supporting facts. We hope your committee will not approve this bill.

Very truly yours,

HARRY R. BRASHEAR,
Director. Traffic Service.

Senator LAUSCHE. With that, the meeting will be adjourned and thank you very much to all of you for your help.

(Whereupon, at 3: 50 p. m., the subcommittee was adjourned.)

(The following report from the Post Office Department, on S. 1769, was subsequently received by the committee:)

Hon. WARREN G. MAGNUSON,

POST OFFICE DEPARTMENT,
OFFICE OF THE POSTMASTER GENERAL,
Washington, D. C., September 12, 1957.

Chairman, Committee on Interstate and Foreign Commerce,

United States Senate.

DEAR MR. CHAIRMAN: Reference is made to the request for a report on S. 1769, a bill to require common carriers to give passenger service information in daylight-saving time.

This measure would amend the present law (15 U. S. C. 262, entitled “Standard Time Act") by adding a provision requiring that the common carriers in their timetables and other literature distributed to the general public and in giving information concerning passenger service to the public, shall state the times of arrivals and departures of passenger vehicles in the standard time of the place of arrivals and departures and also in the time of any officially adopted local or daylight-saving time.

The timetables to be affected are only those furnished to the general public and not the schedules used internally by the railroad companies, which are also furnished to the Post Office Department and to regional and district transportation managers. It appears also that the measure would not apply to the Official Railway Guide, a publication which is used extensively in the postal transportation service, since it is obtained by annual subscription.

The bill would have no adverse effect on that segment of the public which schedules its mailings in accordance with railroad timetables, such as the patrons who deposit their mail in depot letterboxes for collection by the railway postoffice crews.

The information proposed would be beneficial to employees of this Department while in a travel status.

In view of the foregoing this Department interposes no objection to the enactment of this legislation.

The Bureau of the Budget has advised that there would be no objection to the submission of this report to the committee.

Sincerely yours,

MAURICE H. STANS, Acting Postmaster General.

(The following extracts from Interstate Commerce Commission Reports were presented for the record:)

We are of the opinion that a single scale of minimum rates should be prescribed for motor common and contract carriers. The prescribed basis will probably require some increases in motor-carrier rates, but no reductions in such rates are contemplated. It appears unnecessary to prescribe minimum motorcarrier rates for distances exceeding 500 miles, as the record indicates that substantially all of the motor-carrier movements of this traffic are for distances

under 500 miles. Railroad mileages are more definite and certain, and more readily ascertainable and stable than highway mileages and should be used as a basis for computing distances in connection with the prescribed rates; otherwise uniformity in specific rates would not be accomplished.

The rail rates on list 1 articles are and have been based on the basic 17,000 rates plus all authorized general increases, and the evidence is not persuasive that the maintenance by rail carriers of a lower level of rates on list 2 articles than on list 1 articles is unduly preferential of or prejudicial to traffic or persons. On this record however, the maintenance of lower motor-carrier rates on list 1 aticles than on list 2 articles is without justification.

Upon consideration of all of the evidence, we are of the opinion that reasonable minimums motor-carrier rates, subject to a minimum weight of 30,000 pounds. will be rates based on the distance scale set forth in appendix ♬ heretot, applied in the meanner indicated in section 2 thereof; and that minimum reasonable motor-carrier rates for minimum weights less than 30,000 pounds will be rates based on this same distance scale plus 15 percent.

We find that:

1. The rates of the respondents in Nos. MC-C-1510 and MC-C-1629 on the iron and steel articles included in groups 1, 2, 3-A, 3-B, 4, 5, 6–A, 6-B, 7, 8-A, and 8-B of appendix A hereto, between points in eastern territory, as defined herein, are and will be unjustly and unreasonably low, and in contravention of the national transportation policy, to the extent that they are or may be lower than the minimum reasonable rates prescribed in finding 2.

2. The minimum reasonable rates on the commodities and between the points referred to in finding 1 are and for the fututre will be, the rates shown in appendix E hereto.

3. The rates on the iron and steel articles included in appendix A hereto which are now published by the respondents in Nos. MC-C-1510 and MC-C-1629, or in which such respondents participate, between points described in finding 1, and which are published in the tariffs or schedules in the form of distance scales, are not specific and certain, are in violation of sections 216, 217, or 218 of the act, and should be canceled.

4. The rates on the iron and steel articles and between the points referred to in finding 1, no lower than those prescribed in finding 2, should be published in the respondents' tariffs or schedules as specific rates.

The minimum reasonable rates prescribed herein will permit the motor carriers to compete with the rail carriers upon fair and reasonable terms, particularly for the small-quantity movements, and at the same time permit the rail respondents to handle the larger shipments. The prescription in this proceeding of minimum reasonable rates does not contemplate that the rail respondents will forthwith reduce to the lowest level here permitted all of their present rates, particularly those intended for interterritorial application, which are now higher than the prescribed minima. They, as well as the motor carriers, should endeavor to conserve revenues as much as possible, and not permit all rates to gravitate to the lowest possible level. The evidence is clear that the competition for this traffic is such as to border upon the destructive, and threatens to decrease the financial stability of the respondents. The exercise of the power to fix minimum reasonable rates is here required in order to prevent destructive competition and to stabilize the rates at a level which will permit each mode of transportation to participate in the traffic in a just and reasonable

manner.

We conclude:

1. That the carload rail rates and the truckload contract and common motor carrier rates on canned goods from, to, and between points in official territory here under investigation are, and for the future will be, unjust and unreasonable in and to the extent that they are or may be lower than on the respective bases prescribed as minimum reasonable in the succeeding paragraphs hereof.

2. That the minimum reasonable rail rates for application on canned goods. as named in item 10 of Agent A. W. Boin's tariff No. A-962, in carloads, from, to, and between points in official territory designated in that tariff, are and for the future will be the proposed rates set out in Appendix A hereto, minima 36,000

and 60,000 pounds, under columns A for distances to and including 1,425 miles, and under columns B for distances over 1,425 miles.

3. That the minimum reasonable rates for application by common and contract motor carriers on the same commodities, in truckloads, from to, and between the official-territory points designated in finding 2, will be the same as the minimum reasonable rail rates subject to a minimum weight of 36,000 pounds, as prescribed in finding 2, subject to a truckload minimum weight of 28,000 pounds; provided, that motor-carrier rates, subject to a truckload minimum weight of less than 28,000 pounds but not less than 20,000 pounds, may be maintained which exceed the minimum rates herein prescribed for like distances by not less than 3 cents per 100 pounds.

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INTERSTATE AND FOREIGN COMMERCE

UNITED STATES SENATE

EIGHTY-FIFTH CONGRESS

FIRST SESSION

ON

S. 1856

A BILL TO PROVIDE FOR THE DEVELOPMENT AND
MODERNIZATION OF AIRWAYS TRAFFIC

CONTROL AND NAVIGATION

MAY 14, 15, AND 27, 1957

Printed for the use of the Committee on Interstate and Foreign Commerce

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