PROBLEMS OF INDEPENDENT WATER CARRIERS
REGARDING PROPOSED ICC REGULATION

WEDNESDAY, DECEMBER 3, 1947

HOUSE OF REPRESENTATIVES,

SELECT COMMITTEE ON SMALL BUSINESS,

Washington, D. C.

The committee met at 9:40 a. m., pursuant to call, in room 131, Old House Office Building, Hon. Walter C. Ploeser (chairman) presiding. The CHAIRMAN. The committee will come to order.

The purpose of this hearing is to hear certain opinions or complaints about S. 1141, which is before one branch of the Congress, which affects generally small barge-line operators.

(The bill is as follows:)

[S. 1141, 80th Cong., 1st sess.]

A BILL To amend the Transportation of Explosives Act, as amended

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That sections 232, 233, 234, 235, and 236 of the Act entitled "An Act to codify, revise, and amend the penal laws of the United States", approved March 4, 1909, as amended, are amended to read as follows: "SEC. 232. As used in this section and in sections 233, 234, 235, and 236, the term

"(a) 'Person' means any individual, partnership, corporation, association, joint-stock company, business trust, or other organized group of individuals, or any trustee, receiver, assignee, or personal representative thereof, and includes any department or agency of the United States, any State, the District of Columbia, or any other political, governmental, or legal entity.

"(b) 'Carrier' means any person transporting property or passengers on land, by water, or by air, and includes any common, contract, or private carrier, also any freight forwarder.

"(c) 'Commission' means the Interstate Commerce Commission.

"(d) 'Car' means any conveyance used or usable for the transportation of property or passengers by railroad.

"(e) 'Vehicle' means any conveyance, other than a car, as defined in subparagraph (d), used or usable for the transportation of property or passengers upon land.

"(f) Vessel' means any watercraft used or usable for the transportation of property or passengers by water, exclusive of (1) any public vessel which is not engaged in commercial service and (2) any vessel constructed or converted for the principal purpose of carrying inflammable or combustible liquid cargo in bulk in its own tanks which vessel is subject to the provisions of section 4417a of the Revised Statutes (U. S. C., 1940 edition, title 46, sec. 391a).

"(g) 'Aircraft' means any contrivance used or usable for the transportation of property or passengers by air.

"(h) 'State' means a State of the United States, the District of Columbia, or a Territory or possession of the United States. "(i) 'Commerce' means

"(1) when the United States is not engaged in any war, commerce between any State and any place outside thereof or commerce between places in the same State through any place outside thereof, including national or international waters; and

1

"(2) when the United States is engaged in any war, commerce as defined in clause (1) of this subsection and, in addition thereto, commerce between any place in any State and any other place in that State.

"(j) 'Dangerous articles' means any substance having explosive, combustible, inflammable, oxidizing, corrosive, or poisonous characteristics.

"SEC. 233. (a) The Commission is authorized and directed to prescribe and promulgate with or without hearing or notice (except as provided in paragraph (c) of this section) such rules and regulations relating to containers, the handling, marking, labeling, packing, stowage, certification, transportation, or storage or other matters incidental to transportation of dangerous articles transported or to be transported in commerce as the Commission may deem necessary to provide for the safe transportation in commerce of such articles, and to amend, modify, suspend, or revoke such rules and regulations. The rules and regulations, and any amendment, modification, suspension, or revocation thereof, prescribed and promulgated by the Commission, shall, unless a shorter time is specified by the Commission, take effect on the ninety-first day after the issuance thereof.

"(b) The Commission shall have authority and power at any time to institute an investigation, either on complaint or on its own motion, in any case and as to any matter or thing concerning the safe transportation of dangerous articles, or any question which may arise under any of the provisions of sections 232, 233, 234, 235, or 236. Report of such investigation, at the discretion of the Commission, may be entered of record.

"(c) The Commission may exempt any person, carrier, or dangerous article from any provisions of this section or any regulations established hereunder after a public hearing and a finding that the transportation conveyance, route, area of operations, characteristics of dangerous articles, or other conditions or circumstances are such as to render the application of sections 233, 234, 235, or 236 or any of the regulations pursuant thereto, unnecessary for purposes of safety: Provided, That a public hearing may be dispensed with in an emergency as declared by the Commission.

"SEC. 234. (a) It shall be unlawful for any carrier or agent of any such carrier to accept for transportation or to transport or attempt to transport in commerce by means of any car, vessel, vehicle, or aircraft operated by any carrier engaged in commerce any dangerous article unless such dangerous article is handled, marked, labeled, packed, stowed, certified, transported, and stored in accordance with, and otherwise complies with, the regulations prescribed by the Commission under the provisions of section 233.

"(b) Every carrier shall refuse to transport any dangerous article in violation of any provisions of this section and the regulations established pursuant to section 233 and any carrier may require that any container or package, which there is reason to believe contains dangerous articles, be opened to ascertain the facts.

"(c) It shall be unlawful for any person or agent of any such person to offer, tender, or deliver or cause to be offered, tendered, or delivered, for transportation in commerce by means of any car, vessel, vehicle, or aircraft operated by any carrier engaged in commerce any dangerous articles unless (1) such article has been handled, marked, labeled, packed, stowed, and certified in accordance with, and otherwise complies with, the regulations prescribed by the Commission under the provisions of section 233; and (2) such person or his agent shall inform such carrier or his agent in writing of the true character of such article at or before the time of offering, tendering, or delivering such article.

"(d) Whoever knowingly violates or causes to be violated any provision of this section shall, if no death or bodily injury of any person results from such violation, be punished, (1) upon a first conviction for such a violation, by a fine of not more than $500 and not less than $100, or by imprisonment for not more than one year, or by both such fine and imprisonment, and (2) upon subsequent conviction for such a violation, by a fine of not more than $5,000 and not less than $1,000 or by imprisonment for not more than five years, or by both such fine and imprisonment. Whoever knowingly violates or causes to be violated any provision of this section shall, if death or bodily injury of any individual results from such violation, be punished by a fine of not more than $10,000 and not less than $5,000, or by imprisonment for not more than ten years, or by both such fine and imprisonment.

"(e) In the event the owner, charterer, agent, master, or person in charge of a vessel knowingly violates any of the provisions of this section or any of the regulations established under section 233, 234, 235, or 236, such vessel shall be liable for the penalty and may be seized and proceeded against by way of libel in

the district court of the United States in any district in which such vessel may be found.

“SEC. 235. (a) The Commission is authorized and directed to administer and execute the provisions of sections 232 to 236 of this Act and the rules and regulations made pursuant to section 233. It shall be the duty of any district attorney of the United States to whom the Commission may apply to institute in the proper court and to prosecute under the direction of the Attorney General of the United States all necessary proceedings for the enforcement of the provisions of such setcions and of the rules and regulations of the Commission made pursuant to section 233. The costs and expenses incident to any such proceedings shall be paid out of the appropriation for the expenses of the courts of the United States. For the purposes of sections 232 to 236 of this Act, the Commission shall have power to require, by subpena, the attendance and testimony of witnesses and the production of all books, correspondence, papers, tariffs, contracts, agreements, memoranda, and documents, relating to any matter under investigation by the Commission.

"(b) If any person violates any provision of sections 232 to 236 of this Act or of any rule or regulation of the Commission made pursuant to section 233, the Commission or the Attorney General of the United States may apply to any district court of the United States having jurisdiction of the parties, for the enforcement of such provision or of such rule or regulation; and such court shall have jurisdiction to enforce obedience thereto by a writ or writs of injunction or other process, mandatory or otherwise, restraining such person and any officer, agent, employee, or representative of such person from further violation of such provision or of such rule or regulation and enjoining obedience thereto.

"(c) Nothing contained in sections 233, 234, 235, or 236 shall be construed as preventing the enforcement of reasonable State and local regulations now in effect or hereafter adopted which are not inconsistent or in conflict with sections 232 to 236 of this Act or the regulations of the Commission established pursuant thereto. "SEC. 236. (a) The Commission is authorized to employ such personnel as it shall deem necessary or desirable for the effective administration of sections 232 to 236 of this Act. Such employees shall be appointed according to the rules and regulations of the Civil Service Commission.

"(b) In the administration and execution of the provisions of sections 232 to 236 of this Act, the Commission may, (1) with the consent of the head of any Department or agency of the United States Government, utilize the services, records, advice, or assistance of such Department or agency and may make reasonable compensation to such Department or agency therefor; or (2) enter into agreements with any other public agency or any private agency for the utilization of its services, records, advice, or assistance at a reasonable rate of compensation or without compensation. No official or employee of the United States shall receive any additional compensation by reason of the utilization of any such services, records, advice, or assistance, except as permitted by law. "(c) The Commission may cooperate with, and avail itself of the services, records, and facilities, of, the several States or political subdivisions thereof to the extent practicable in connection with any matter arising in the administration or enforcement of sections 232 to 236 of this Act, and may assist the officials and agencies of each of the several States or political subdivisions thereof in preparing legislation and in formulating rules and regulations pertaining to dangerous articles."

SEC. 2. Section 4472 of the Revised Statutes (U. S. C., 1940 edition, title 46, sec. 170) is hereby repealed.

SEC. 3. The second proviso in paragraph (4) of section 4417a of the Revised Statutes, as amended, is amended to read as follows: "And provided further, That no permit shall be issued under the provisions of this section authorizing the presence on board any vessel of any fulminates or other detonating compounds in bulk in dry condition, or explosive compositions that ignite spontaneously or undergo marked decomposition when subjected for forty-eight consecutive hours to a temperature of one hundred and sixty-seven degrees Fahrenheit, or compositions containing an ammonium salt and a chlorate, or other like explosives." SEC. 4. This Act shall become effective ninety days after the date of its enactment. The Interstate Commerce Commission may, in the performance of its functions under section 233 of such Act of March 4, 1909, as amended, adopt the regulations of any Federal Government agency, in effect on the effective date of this Act, governing the safe transportation of dangerous articles, pending the formulation and promulgation of regulations by the Commission. Thereafter the Commission shall, not later than six months after the date of enactment of

this Act, formulate and promulgate the rules and regulations which it is authorized and directed by such section 233 to prescribe and promulgate: Provided, That the Commission shall, if found by it necessary or desirable in the public interest, by general or special order, postpone the formulation and promulgation of such rules and regulations to such time after six months after the date of enactment of this Act as the Commission shall prescribe, but not beyond twelve months after the date of enactment of this Act.

The CHAIRMAN. I have asked Mr. Foristel to prepare the agenda for today, and I will turn the agenda over to him.

Mr. FORISTEL. There are approximately 60 barge lines represented here in the committee room. I would like to call as the first witness, Mr. Joseph D. Henderson, who will outline the complaints of these gentlemen.

Mr. HENDERSON. My name is Joseph D. Henderson. I am the na-. tional managing director of the American Association of Small Business, incorporated under the laws of the State of Louisiana, February 20, 1942, with national headquarters in the city of New Orleans, La. The CHAIRMAN. We are glad to have you here, Mr. Henderson, and we would like to have you proceed with the testimony.

Will you raise your right hand and swear that the testimony you are about to give will be the truth, the whole truth, and nothing but the truth?

Mr. HENDERSON. I do.

The CHAIRMAN. Proceed.

TESTIMONY OF JOSEPH D. HENDERSON, NATIONAL MANAGING DIRECTOR OF THE AMERICAN ASSOCIATION OF SMALL BUSINESS, NEW ORLEANS, LA.

Mr. HENDERSON. The entire membership of the American Association of Small Business is grateful for your invitation to appear before this committee in behalf of small barge-line operators in opposition to the extension of the jurisdiction of the Interstate Commerce Commission over the transportation by water of all dangerous cargo.

A large majority of all the transportation in the United States which includes railroad, air lines, and the larger common water carriers are operating at a loss. In contrast a small group is healthy and operating at a profit. This small segment is represented here this morning asking to remain healthy. They are the small independent contract barge-line operators. They fear the same regulation by Government under which the large transportation group is handicapped. I have always considered our waterways as the highways of free enterprise from the beginning of time. I am convinced that in a large measure the cost of reporting to Government is the reason that the majority of carriers find themselves in financial difficulty.

All too seldom are those in public office commended for meritorious service rendered to the people. The members of this association are grateful for the splendid work that has been done by the Honorable Walter C. Ploeser, chairman of the House of Representatives Select Committee on Small Business. In our opinion, the members of Congressman Ploeser's committee, including the staff, have done an outstanding job. The Select Committee on Small Business has been of great assistance in working on the problems confronting small businessmen of our Nation.

At the regular monthly meeting of the board of directors on August 27, 1947, Capt. H. G. Koch, one of our directors, called to our attention the problems faced by the small barge-line operator under the supervision of the Interstate Commerce Commission. In his own case, it became so difficult to operate his business with all the restrictioned regulations and red tape he has experienced as a regulated carrier that he has finally decided to relinquish his permit. Other complaints were presented by members of our association, and on September 25, we wrote the Select Committee on Small Business concerning these conditions. Mr. Harry B. Jordan, chairman of the Water Transportation Committee of the American Association of Small Business is here today and will present his statement later. No effort will be made on my part to go into the technical aspects of barge-line operation other than to mention the hardships and damages which will be experienced by small bulk cargo contract barge-line operators who are now exempted from the regulations of the Interstate Commerce Commission. Should unregulated carriers be placed under Interstate Commerce Commission rate and permit regulations, by a slight modification of a bill presently pending in the United States Senate, their great problem would conceivably be maintaining records, securing cargo rates, and all the other ramifications caused by complete Government restrictions.

One of the principal paragraphs in S. 1141 will be found on page 3, line 16, designated as (j), which reads, "dangerous articles mean any substances having explosive, combustible, inflammable, oxidizing, corrosive, or poisonous characteristics." This wording is brought to the attention of the committee and the members of this association as well as all small barge-line operators, because of the all-enveloping, interpretation which can be placed upon its meaning. A dangerous article may even be the paint of the hull of a barge, because we know that paint oxidizes and is also corrosive. This may sound ridiculous, but funnier things have happened when some of the laws of our land have been interpreted.

There is no need to elaborate further, for others here will testify to the fact that S. 1141 is unnecessary and that it should not be enacted into law, because the small cargo carrier barge lines are now properly supervised by the United States Coast Guard. The Coast Guard record is enviable and statistics will show the minute loss or damage per mile ratio experienced in bulk cargo barge operation. In my opinion, this bill could cause an overlapping of authority, which has proven inefficient in Government operations in the past. We have too many bureaus now created to accomplish measures which should have been allocated to the departments of Government already in operation. Bureaucracy is not the American way of life.

There are certain interests who would be pleased to have this legislation enacted for it might force a number of small barge lines to go out of business. This would mean that other already overcrowded transportation systems would be called upon to handle the bulk cargo barge line operators' traffic. Higher freight rates would be experienced, and, of course, the small businessman and the ultimate consumer would have to pay in the final analysis.

Let me emphasize that the American Association of Small Business has always been against regimentation of business. The association.

68751-48- -2